Climate and Energy最新文献

A current regulatory issue in the United States centers on the business model of utilities, which includes asking to what extent utilities should broaden their activities to satisfy society-wide political demands. There seems to be an inherent discordance between treating utilities as both a for-profit business and a purveyor of public goods. This tension complicates efforts to achieve a political equilibrium (i.e., a consensus) and retain the traditional objective of utility regulation to assure “just and reasonable” prices and reliable service for households, businesses, and other users of utility services. Added objectives in recent years, as I argue below, clash with those traditional objectives.

As greenhouse gas (GHG) emission reduction efforts accelerate, utility regulators nationwide are rethinking the role of natural gas in reducing GHG emissions over current levels. A key strategy emerging in several states is the mandatory consideration of non-pipe alternatives (NPAs); solutions that avoid the need for new natural gas hook-ups. California, Massachusetts, New York, and Colorado are leading the effort, and other states like Maryland, Hawaii, Oregon, Minnesota, and New Jersey are not far behind. Before gaining approval for traditional new pipeline investments as opposed to pipeline replacement, regulators are requiring utilities to thoroughly analyze the costs and benefits of NPAs. This is compelling natural gas utilities to rethink their business models and find the most effective ways to present NPAs to regulators and customers. With this enhanced scrutiny and regulatory mandates that are increasingly focusing on sustainability, natural gas distribution utilities are at a crossroads. The challenge lies in adapting to these expectations and innovating scalable investments that will meet regulatory demands while driving the transition to a cleaner energy future.

When sworn into office in January 2021, the Biden–Harris Administration—through the National Climate Task Force—launched an ambitious, whole-of-government initiative to significantly double efforts and reduce methane emissions from the oil and natural gas sector, landfills, agriculture, and other lesser sources. These initiatives were documented in the U.S. Methane Emissions Reduction Action Plan, which proposed to use regulations, catalytic financial incentives, transparency and disclosure of actionable data, together with public and private partnerships, to identify and reduce methane emissions. President Biden's Build Back Better agenda was designed to accelerate, through investments, many of these domestic methane emissions reduction efforts.

It is widely accepted among energy industry professionals that the industry is undergoing a significant and rapid transformation. There are increasing challenges facing the industry including extreme weather events, widespread aging of the electric grid infrastructure, rapidly increasing electricity demand, as well as the impact of climate change policy initiatives. This has spurred an innovation rebirth in an industry that has traditionally been viewed as outdated, and most importantly inaccessible for participation by average customers. However, as the challenges of the changing industry and effects of climate change are impacting their day-to-day lifestyles, energy customers are now demanding more visibility, choices, and flexibility from their energy providers, putting a spotlight on the roles and services of utility companies.

“Hyperscale” data centers accompanying the rapid growth of artificial intelligence (AI) is one of the fastest growing uses of electricity in the United States and the rest of the world. Indeed, such growth, with the retirement of dispatchable fossil fuel electricity plants, drives persistent warnings about potential reliability problems for the US power system. As Federal Energy Regulatory Commission's (FERC's) Commissioner Mark Christie warned in late July, to the House Subcommittee on Energy, Climate, and Grid Security.

The 2020 COVID-19 pandemic introduced economic calamity and uncertainty in America that had not been seen since the 2007–2008 financial crisis. What began as an uncertain period for individual well-being soon translated into broader economic issues for the American economy. Businesses facing months of lost revenue, deficits, and uncertainty began weakening financially and, as a result, were forced to reduce staff. In the years that have followed, industries which have historically been able to count on stable revenue, such as utilities, particularly suffered. Struggling households and small businesses began missing consecutive monthly payments, and customer debt climbed to unprecedented levels. As of March 2023, “one in six households across the country were behind on their electric bills.”¹ Additionally, instances of non-residential customers falling behind on their payments emerged. Historic levels of arrears continue to mount pressure on the industry, and traditional approaches to arrear collection are not working.

The Southeast Atlantic region (much of it in Virginia and the Carolinas) is anticipating an extraordinary growth in electric demand over the next few years, with a resulting surge in natural gas demand. Utilities in all three states, anticipating rapid growth in electricity demand through the 2030s, have ambitious plans for renewables. However, these states are acknowledging that solar and offshore wind will need to be backed up by a significant increase in natural gas-fired generation to join energy storage in providing load-following dispatchable power, to compensate for the variability of wind and solar generation. There is also a recognition that load is growing too fast to rely solely on new wind and solar for baseload generation. Further, a significant amount of remaining coal-fired generation is expected to phase out in the three states, creating the need for more generation unrelated to load growth.

The American housing stock is in bad condition. According to the National Association for State Community Services Programs (NASCSP), more than 30 percent, or 38.6 million households, qualify for weatherization assistance provided through the Department of Energy (DOE) Weatherization Assistance Program (WAP). However, WAP only served 35,000 low-income homeowners in 2018, and despite the infusion of funds from the Inflation Reduction Act (IRA), the funding will not be enough to serve these Americans.

Decarbonizing our economies represents one of the most significant economic and industrial challenges in modern history. The drive toward decarbonization involves the widespread electrification of vehicles and buildings, adoption at scale of renewable energy resources, and modernization of the electric grid infrastructure. Together, these electrification efforts are projected to cause US electricity consumption to grow by 1.5 percent annually from 2024 to 2026,¹ requiring a tripling or quadrupling in electric generation, transmission, and distribution infrastructure to meet future demands.² While these developments have the potential to create a more sustainable and resilient energy system, they also risk exacerbating existing inequalities.

The regulatory requirements, frameworks and tools for climate risk disclosure and reporting have been expanding at an exponential pace. Beginning in the early 1970's the Securities and Exchange Commission (SEC) required companies to disclose the financial impact of—and risks associated with—compliance with environmental laws based on the concept of “materiality.” Then in 2010, as a result of investor pressure regarding the financial risks of climate change, the SEC issued voluntary guidance to clarify when the impacts of climate change may trigger disclosure obligations.¹ As a result of the Paris Agreement in 2015 there was an international focus on climate change and a simultaneous increase in pressure on businesses to be more accountable for their climate and environmental policies. This translated into a rise in environmental, social, and governance (ESG) and sustainability reports developed by companies in an to attempt to showcase their green initiatives.