Why Are Electric Utilities Warming Up to Energy Grid Climate Goals?

In a surprising change of tune, the larger electric utilities industry is having an “enemy of my enemy is my friend” moment with climate change goals. Utilities’ energy grid climate goals are evolving, en masse, away from being an operational nuisance and a public diversion (while electric utilities pump funds into law firms and attorney generals to combat climate change legislation). More and more, electric utilities are actually putting their lobbying energy behind climate change legislation, even if it means sacrificing ground they previously fought tooth and nail for, like critical coal plants.

This isn’t a natural consequences of shifting priorities for electric utilities. The motivator? Federal subsidies and the promise of profit in the renewables industry. Utilities taking on more climate-conscious energy grid climate goals is being pushed through billions in federal tax breaks, changes to federal tax law, and long-term opportunities for millions in profit by embracing renewable energy alternatives and decarbonization.

The Biden Administration’s Inflation Reduction Act is the perfect example of this; motivating the major players to support the bill through key incentives, utilities like DTE Energy, NextEra Energy, Southern Company, and American Electric Power lobbied for years to pass the bill, adjusted key provisions to reduce pressure on pollution-curbing efforts, all while getting in lock-step with climate goals that would slash their existing carbon footprint.

What are the mutually beneficial consequences of this shift for climate change activists, electric utilities? And can this push for green energy grid climate goals compound in the long-term to make a significant impact in tackling international climate goals? Sarah Kurtz, School of Engineering professor at the University of California Merced who focuses on “trends of growth of renewable energy and research issues that need to be tackled to support continued improvements,” weighs in with her take.

Sarah’s Thoughts

“Today’s news shows that utilities are lobbying for clean energy. Can you believe it? But this is a growing trend. Historically, renewable energy advocates have viewed utilities as a primary roadblock to adopting clean energy technology. But today things have changed. The utilities now know how to use clean energy technology to deliver reliable electricity at a lower price than conventional electric.

This is a big opportunity. The promoters of renewable energy and the utilities who were adversaries before can now be partners. Developing the mutual trust that could enable those productive partnerships will be a challenge because both sides recall previous fights that generated a lot of ill will.

If the two sides can put the fighting behind them, one of the opportunities is that the utilities usually propose low cost approaches that would bring renewable energy to all parts of our energy system. These are likely to be viewed skeptically by the green energy advocates, but the low cost approach will enable us to move farther faster by keeping a healthy economy and getting more people on.”