Federal legislation advances energy transition, but more work to do, utility leaders say
The passage of the Inflation Reduction Act (IRA), the Infrastructure Investment and Jobs Act, and legislation suspending the nation’s debt limit will speed up America’s transition to clean energy, electric company leaders said Tuesday.
During a CEO leadership panel at the Edison Electric Institute’s EEI 2023 conference, Duke Energy CEO Lynn Good moderated a discussion on opportunities and challenges facing the power industry with Ameren Corp. Executive Chairman Warner Baxter, Edison International CEO Pedro Pizarro, and Portland General Electric CEO Maria Pope. Pizarro is the newly elected chair of the EEI Board of Directors, replacing outgoing EEI Chair Baxter, while Pope was elected EEI vice chair.
While recent legislative successes in Congress have paved the way for the investments in important technologies needed for an electric future, work is just beginning.
“If you think about what happened the IRA, that’s going to give us the ability to accelerate investments in important technologies … new solar, new energy storage, new tech, hydrogen, as part of capture … and most importantly is going to be more affordable,” Baxter said. “And if you think about the debt ceiling act and what that means for permitting … it means we’re going to move forward with all these community investment areas.”
Moving forward will mean not just integrating more renewable sources into the grid, but also focusing on supportive federal and state policies like siting and permitting reform to facilitate investment in critical energy infrastructure, including transmission, renewable energy facilities, and natural gas pipelines. Additionally, utilities should remain flexible and consider not just what is best for its customers now, but what will happen to the assets they build 5, 10 and 15 years in the future, the panelists said.
Working with state legislators will be key in helping utilities provide reliable and affordable service to its customers, Pizarro said. In his state of California, the legislature was instrumental in helping deal with the monumental task of deploying capital across the energy sector to help electrify other sectors. The future will require companies to tell their story to regulators to avert knee-jerk reactions to financial pressures, he said.
“As an industry, I think we’ve done a good job, and will continue to do a good job, in delivering affordable power, and we will continue to challenge ourselves in terms of the processes we use … like more digital transformation and AI,” Pizarro said. “But we need to recognize the continuous financial pressures can lead to pressure on our regulators and policymakers to maybe make decisions that might provide some short-term relief for customers, and in the end cost customers… There’s a challenge for us and an opportunity to make sure we’re telling the story of what we’re going to be investing in and why, and how we are really doing that for our customers.”
Other challenges will continue to evolve, Pope said. A member of EEI’s CEO Wildfire Task Force, Pope said the group works closely with the White House to address issues that may arise from climate change to evolving security threats. EEI’s CEO Wildfire Task Force and the Electricity Subsector Coordinating Council’s (ESCC’s) Wildfire Working Group, which includes EEI member electric companies, are focused on a comprehensive wildfire strategy that includes mitigation efforts, detection, and response.
Working with the federal government to address wildfire challenges for the power sector will be key to managing those threats in the future, she said.
“There’s no question that working with the government at the highest levels gets results,” she said. “(We’ve been) working with… the Department of Energy’s National Labs on really important technologies, next generation technologies, that are not only enhancing how we fight wildfires, and mitigate against them, but also how we create a cleaner grid, which will mitigate some of the effects of climate change, because we need to be able to do both at the same time.”
Moreover, the panel said, the future will require working with the federal government on rules regarding siting, environmental regulations, and the use of natural gas. As the country navigates the clean energy transition, Baxter said, natural gas will have to be a part of the solution in order to maintain reliability and affordability.
“Natural gas is going to make sure we get reliability as we go through this transition,” Baxter said. “Secondly, I think it’s going to help us accelerate renewable deployment during this transition. And thirdly, it’s going to be part of a balance of resources that we’re going to need in the long term to make sure that we have the responsible, effective energy transition that we all want.”
Environmental justice is another issue that’s important to both policymakers and electric companies. Working with low-income communities to ensure rates are equitable and affordable throughout the clean energy transition will remain top of mind, the CEOs said.
Pizarro said making sure the clean energy transition is inclusive is top of mind. This is done at his company by tailoring customer programs to make sure they are targeted to disadvantaged customers.
