Policymakers, regulators and the US power sector may need to rethink the pace of their decarbonization efforts due to "risk in the marketplace" from the loss of traditional generating resources, the Edison Electric Institute's new CEO, Dan Brouillette, warned Jan. 24.

Brouillette, who took over as head of the investor-owned utility advocacy group, known as EEI, at the beginning of January, said natural gas will be "increasingly important" to keeping a healthy grid, contrasting with calls from some companies and climate advocates to quickly move away from fossil fuels for electricity production.

"I think it's perfectly reasonable to ask the government to slow down some of its environmental policymaking as they assess what the impacts are on the ability of the industry to meet the load demand," Brouillette said during a roundtable with reporters at EEI's office in Washington, DC.

"We're creating risk in the marketplace," asserted Brouillette, who served as US secretary of energy under former President Donald Trump. "The amount of demand that's coming online, the amount of load that's being added to the industry, is outpacing our ability to do that with clean energy, to do that with renewable power."

The Biden administration has called for a carbon-free electric grid by 2035, part of a longer-term goal for a net-zero emissions economy by midcentury.

But many utilities' net-zero targets are set for 2050, reflecting concerns over how to replace coal and gas generation, which together made up about 60% of US electric output in 2022. In addition, utilities are facing the likelihood of higher demand from datacenters, vehicle electrification and other new sources.

Brouillette said small modular reactors and other emerging nuclear technologies could help fill that hole, but that gas-fired capacity will still be needed for decades.

"Given the amount of load we have, we're going to be using natural gas for quite some time," Brouillette said. "As we think about the next, call it 10 years ... 20 years, natural gas is going to be an increasingly important part of the stack."

On the regulatory front, EEI is working closely with the US Environmental Protection Agency as the agency finalizes proposed greenhouse gas emissions rules for power plants. The regulations, which the EPA released in May 2023, would require nearly all coal plants without carbon capture and sequestration technology to be retired by 2035. In addition, larger natural gas-fired power plants would have to co-fire with 30% clean hydrogen by 2032, ramping up to 96% by 2038.

In comments on the proposal filed in August 2023, EEI said the regulations did not account for the role that gas-fired units play in bulk power system reliability.

Brouillette said EEI is trying to make sure compliance deadlines under the EPA's final rules align with utilities' infrastructure investments. Although the agency is listening to those concerns, "they've not given us any final decisions," he said.

"The relationship [with EPA] is good," Brouillette said. "They're hearing us out, but it's about as much as we can ask for at the moment. We'll have to wait and see where they end up."

Climate law here to stay

Despite urging caution on the energy transition, Brouillette praised recent climate-focused laws including the bipartisan infrastructure law of 2021 and Inflation Reduction Act (IRA) of 2022, the latter of which contained billions of dollars in tax incentives for clean energy technologies across the next decade.

GOP lawmakers in Congress have repeatedly attacked the law, with the Republican-majority House attempting to repeal key provisions. But Brouillette expects the IRA to remain largely intact even if Republicans retake the White House and win both chambers of Congress in the 2024 elections.

"You've seen all the stories about how a lot of the incentives or the money or the policy is being utilized in red states," Brouillette said. "I also think that people recognize that a lot of these policies are not new ... The incentives for nuclear policies are something that Republicans and Democrats have supported for a long time."

Some elements of the two laws could be repealed under full Republican control of both Congress and the White House, Brouillettte predicted. But "the vast majority of it is going to stay in place, will be my guess," he added, including the IRA's technology-neutral clean electricity credits taking effect in 2025.

US utilities recently came under criticism from the Sierra Club over their IRA implementation efforts. The environmental advocacy group conducted a study of 50 utilities' planning documents since the IRA's enactment and said that none of them had fully evaluated the law's benefits and incentives. EEI pushed back on the study, saying utilities are still awaiting final guidance from the US Treasury Department on many IRA tax provisions.

"What we really think is important is the certainty," Brouillette said. "We would like whatever they do to be locked in for a period of time that we can count on for purposes of investment."

Eye on nuclear, transmission permitting

The new EEI head also voiced support for advanced nuclear reactors and called for permitting reforms to ease transmission development.

Although EEI members are willing to consider advanced reactor projects, "state regulators won't let you take that first-of-a-kind risk" in many cases, Brouillette said. But utilities could be willing to use more nuclear technologies if they can find a "middle ground on the economics" and work with technology developers to gain approval from state regulators.

"To the extent we can bring [those reactors] into the marketplace, I think we ought to," Brouillette stated.

Brouillette suggested that the US Nuclear Regulatory Commission (NRC) follow Canada's regulatory framework, which enables an interim step toward new reactor approval that allows companies to raise capital from investors. By contrast, the NRC rules have companies waiting for approvals that put the industry in a difficult position to raise money.

Brouillette also said the US should review whether the NRC regulatory model for conventional nuclear facilities should apply to advanced reactors. "The answer may be yes ... but we ought to have that review," he said.

The EEI CEO also discussed permitting challenges for transmission developers despite calls to expand the grid to accommodate more renewable resources. Transmission investment by EEI members was estimated to total $30.7 billion in 2023, about $1 billion less than in 2022, according to data that EEI provided to reporters.

Use of grid-enhancing technologies to improve transmission flows on existing lines is "an obvious solution to some of the challenges that we have," Brouillette said. But a slow permitting process is the main impediment to a bigger, more modern grid, he emphasized.

Brouillette promised to "double down" on EEI's past efforts to encourage Congress to improve the lengthy federal permitting process for transmission.

"I think my ability to cross the aisle and my ability to bring these people together is established, and I hope to do that exactly on this issue," Brouillette said.