US utility CEOs tout emission-reduction goals at COP26

The Biden administration's proposals for reining in carbon dioxide emissions from the U.S. utility sector have not been popular with all industry players, but no such friction was detectable Nov. 5 when the Edison Electric Institute got a top administration official together with four utility executives at the COP26 climate summit in Glasgow, Scotland.

"Sometimes we're ticked off at one another, which is OK. It's like family; you don't like each other all the time and you have disagreements," Gina McCarthy, the White House national climate adviser, told four CEOs at a panel on how U.S. utilities are aiming for net-zero emissions. "But, frankly, we never left the table. We never stopped talking."

Power companies in states with ambitious climate targets, such as those speaking at COP26, have been prompted to speed up coal plant closures and investments in renewables and energy efficiency programs in recent years. Such investments came regardless of who resided in the White House.

"We've been very lucky in the states where we're operating," National Grid PLC CEO John Pettigrew told the panel. "We've seen the states being incredibly supportive of our net-zero journey and, actually, much so during the previous administration. What we've seen is a ratcheting up of all the targets for National Grid."

National Grid plans to reduce carbon emissions by 80% by 2030 and by 90% by 2040 below 1990 levels before reaching net-zero a decade later. It also committed to cutting Scope 3 emissions, which are the hardest to abate, by 20% by 2030.

The company is investing heavily in offshore wind and solar energy, electric vehicle charging stations and energy efficiency while trying to crack the toughest nut: decarbonizing heating from natural gas. National Grid is looking for breakthroughs in renewable gas and hydrogen to get there.

Ralph Izzo, president and CEO of the Public Service Enterprise Group Inc., said the company will, among other things, invest $1 billion over the next three years in energy efficiency programs in New Jersey. For each ton of carbon that such efficiencies save, customers will save $125, Izzo said.

"Right now, my shareholders are totally indifferent as to whether we install a thermostat or an LED lightbulb or invest in distribution service," Izzo said. "We literally see no difference in the economic treatment of those assets."

PSEG, which has a large nuclear fleet, aims to reach net-zero emissions by 2030, one of the most ambitious goals set by any U.S. utility.

"We never left the journey to clean energy," McCarthy said. "We have seen that even in times when regulations were turned back that things moved forward even more quickly than our regulations would have required. Because the funny thing ... with the private sector is that if they see money, they chase it."

Like the other executives, Pat Vincent-Collawn, president and CEO of PNM Resources Inc., said the energy transition has put equity issues at the forefront of the company's plans to shut down New Mexico coal plants.

Under the state's landmark Energy Transition Act, utilities are allowed to securitize the stranded costs of those plants to access low-cost financing. That will allow more money to be channeled to communities in the Navajo Nation where mining and plant jobs were lost, Vincent-Collawn said.

'A pot of gold'

Operating under California's ambitious climate mandates, Edison International has been analyzing what the transition to a clean grid will look like for the company and the state's economy.

Cutting California emissions by 50% below 1990 levels by 2050 and reaching net-zero by 2045 will require an additional 80 GW of renewable energy to be installed along with 30 GW of energy storage, said Pedro Pizarro, the utility's CEO. In all, statewide investments could reach $250 billion.

"It's a lot of investment, but there is a pot of gold at the end of the rainbow," Pizarro said. "We estimate that the average customer in 2045 will actually be spending one-third less ... on their total energy. They will be spending more on electricity because they are using more, but gasoline with go down to zero and natural gas will go down significantly."

For such savings to materialize and for California to meet its climate goals, annual emission reductions need to quadruple over the next eight years, Edison's analyses show.

"So it's going to require significant work at the federal level with policies at the state level as well," Pizarro said. "We need partnerships from across the industry and across all government levels."

To partner and network was also why the utility executives traveled to Scotland to attend the climate summit.

"Thank you for showing the world what kind of human beings we have running our energy system and how much we care about delivering an energy system that the world can live with," McCarthy told them.