4 Reasons States and Utilities Should Continue Reducing Power Emissions, Despite Clean Power Plan Stay
On February 9, the U.S. Supreme Court temporarily halted implementation of the Clean Power Plan (CPP). The CPP, which aims to reduce states’ power sector emissions, is being challenged in the D.C. Circuit appeals court by a number of states, corporations and industry groups. Importantly, this “stay” was not a ruling on the merits of the CPP; the D.C. Circuit court will hear arguments on the merits of the case on June 2nd. The stay will last until the case is fully resolved, likely by the Supreme Court in 2017 or 2018.
Despite the stay, EPA is continuing to provide states with tools and support to comply with the CPP and cut emissions from their power sectors. Many states have affirmed that their plans to comply with the CPP remain unchanged, and numerous utilities have stated they will continue reducing carbon pollution.
Here are four reasons why states and utilities should continue reducing emissions from their power sectors:
1) Experts say the Clean Power Plan is on firm legal ground.
The Supreme Court has said three separate times that the EPA has the authority to regulate carbon pollution, and experts say the Clean Power Plan is legally solid. The temporary stay gives parties time to make their case before the D.C. Circuit before states formally implement the plan. By continuing to prepare for the CPP, states will have time to design smart strategies and maximize economic benefits from investments in energy efficiency and clean energy.
2) Most states have renewable and energy efficiency targets that require stronger action to achieve.
Twenty-nine states and the District of Columbia have renewable portfolio standards (RPS), and 26 states have energy efficiency standards or goals. To meet these existing policies and targets, states will need to strategize how to drive additional emissions reductions and increase investments in clean energy. Actions taken now (or in the future) to achieve these existing targets can count toward states’ CPP compliance, effectively killing two birds with one stone.
3) Efficiency and renewable energy can save states money and create jobs.
Energy efficiency has long been a cost-effective way to reduce the need for carbon-intensive electricity. According to reports by public utility commissions, utilities, program administrators and others, energy efficiency programs have typically saved customers at least $2 for every $1 invested. For example, Pennsylvania’s Public Utility Commission found that the state’s utilities not only exceeded their targets during the first phase of its energy efficiency program, but that the investments made will result in a net $2.5 billion in cost savings. Program evaluations by the Michigan Public Service Commission for the years 2010–13 estimated that every dollar invested in the state’s efficiency programs will return $3.55–$4.88 in savings. The life-cycle savings of programs implemented in 2013 alone are expected to reach nearly $1 billion.
Similarly, renewable energy has never been a smarter investment for states. Wind turbine prices have been declining since 2008, while average solar PV prices have been falling since 2007 and are expected to continue their decline over the next several years. What’s more, at the end of 2015, Congress voted to extend the Production Tax Credit (PTC) for wind and Investment Tax Credit (ITC) for solar projects, making these options even more affordable. NREL recently found that extending these credits would result in almost 55 GW of new wind and solar generation capacity between 2016 and 2022 beyond what would have occurred due to the Clean Power Plan alone. The Rhodium Group projected even more—more than 90 GW between 2016 and 2022.
The renewable energy sector has also been creating jobs. The U.S. solar industry now employs almost 209,000 workers, and has been adding workers at a rate almost 12 times faster than the economy at large. The latest estimate from the Department of Energy finds that the U.S. wind industry supported more than 73,000 jobs in 2014, a 30 percent increase over 2013.
4) There is strong demand from companies for greater access to renewable energy.
As of 2013, 60 percent of the Fortune 100 had set targets to reduce greenhouse gas emissions and buy clean energy. In 2015 alone, companies signed 3.4 GWs of renewable energy purchases, tripling 2014’s total. Additionally, Bloomberg New Energy Finance estimates corporate buyers made up about 40 percent of the power purchase agreement market in 2015.
Corporate energy buyers are also sending an increasingly powerful message to their service providers, customers, utility regulators and elected officials that they are an active partner in transforming the power sector. In fact, 51 companies have signed on to the Renewable Energy Buyers’ Principles seeking access to 42 million MWh of new renewable energy by 2020 – enough to power nearly 4 million U.S. homes.
The Bush Administration was sued successfully by several states and environmental groups for failing to address GHG emissions, and the Supreme Court has reaffirmed EPA’s obligation to regulate emissions under the Clean Air Act three times since 2007. This history shows us that it’s not a matter of if the Supreme Court allows EPA to move forward with the CPP, but when. States would be wise to get out in front of forthcoming power sector regulations, rather than play catch up later. Doing so would also allow states and utilities to continue take advantage of market trends while harnessing economic opportunities for citizens and other energy consumers.