March 13, 2018 Read More →

U.S. Utilities Aim to Exceed State Renewable Mandates, but at Their Own Pace

Midwest Energy News:

A Midwest Energy News review of investor-owned utilities in the region found three-quarters of them have made voluntary renewable or emission pledges that go above and beyond what’s required under state laws. It found:

  • Of the 17 companies, all but four have set targets for renewables, emissions or both. Seven utilities have renewable energy targets, while 10 have emission reduction pledges.
  • Most renewable energy pledges range between 30 percent and 50 percent, while most emission reduction promises are at least 80 percent. The average duration exceeds 20 years.
  • Iowa-based MidAmerican Energy has the most aggressive pledge, vowing to go 100 percent renewable energy even though the state hasn’t updated its renewable energy standard since 1983.

The voluntary pledges allow utilities to set the terms and timeline for their investments in renewable energy. They often draw positive headlines, and ultimately they don’t conflict with the companies’ bottom lines as the cost of renewables continues to fall.

Critics, though, say that most utility pledges lack urgency and allow them to continue burning fossil fuels for decades. They also have potential to obscure the need for extending state renewable energy standards.

Voluntary pledges, unlike Michigan’s more modest renewable mandate, allows the company flexibility in how they reshape their generation portfolios and invest in new power plants or infrastructure.

“We don’t want anyone to think we’re against renewables,” said Irene Dimitry, vice president of business planning and development for DTE Energy. “The ability to take advantage of market dynamics and pace our investments overall — so we’re pacing rate impacts — we think that’s really important.”

Renewable costs continue to decline, and being forced by law to lock into contracts today could mean customers pay more than if the company staggered investments to take advantage of falling prices, Dimitry explained.

Cathy Kunkel, an energy analyst with the Institute for Energy Economics and Financial Analysis, said it’s “not terribly surprising” that utilities would oppose state-level mandates while simultaneously pledging to surpass them.

“Obviously utilities and their shareholders would rather do things on their own terms than what’s legislated or directed by voters,” Kunkel said. “They would rather have more flexibility.”

More: Utility Renewable Pledges Go Above and Beyond State Laws—But Why?

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