BOSTON, MA (July 24, 2014) -- As the U.S. Environmental Protection Agency (EPA) prepares for July 29-Aug 1 listening sessions on its Clean Power Plan for existing power plants, a new report from Ceres and Clean Edge ranks the nationâ€™s largest electric utilities and their local subsidiaries on their renewable energy sales and energy efficiency savings. The report found that many utilities are deploying lower carbon fuel sources and that state policies are a key driver in that performance, but there is variability in performance even among utilities operating in the same states.
A first-of-its-kind report, Benchmarking Utility Clean Energy ranks the 32 largest electric utility holding companies, which collectively account for about 68 percent of 2012 U.S. retail electricity sales, on three clean energy indicators. The report also provides data on 87 subsidiary companies â€“ the distribution utilities to which electricity consumers pay their monthly bills. Subsidiariesâ€™ rankings generally tracked with the rankings of their larger parent holding companies â€“ though some outperformed or underperformed their owners and peers.
â€œRenewable energy and energy efficiency, two of EPA's Clean Power Plan building blocks, are increasingly cost-effective options for electric utilities seeking to lower their carbon emissions,â€ said Mindy Lubber, President of Ceres, a nonprofit sustainability advocacy organization, which authored the report in partnership with Clean Edge. â€œOur analysis shows that some utilities are beginning to deliver substantial amounts of clean energy and energy efficiency, while others are lagging.â€
Among the 32 holding companies, NV Energy, Xcel, PG&E, Sempra, and Edison International were found to rank the highest for renewable energy sales, with renewable resources accounting for nearly 17 to 21 percent of their retail electricity sales in 2012. Southern Company, SCANA, Dominion, AES, and Entergy ranked at the bottom, with renewable energy sales accounting for less than two percent of each companyâ€™s total power sales. Five of the 32 companies included in this report accounted for nearly 54 percent of renewable energy sales.
â€œXcel Energyâ€™s clean energy strategy is a model for how utilities and states can work together to significantly reduce emissions at the lowest cost for customers,â€ said Frank Prager, vice president, Policy and Strategy, for Xcel Energy. â€œCollaborating with our states has enabled us to provide the renewable resources and efficiency programs that customers value without compromising the highly reliable and affordable energy service they require.â€
Energy efficiency top performers among holding companies included PG&E, Edison International, and Northeast Utilities, whose cumulative annual energy efficiency savings were equivalent to 16 to 17 percent of their annual retail electric sales in 2012. PSEG, SCANA, Pepco Holdings, Dominion Resources, and Entergy ranked at the bottom, with cumulative annual energy efficiency savings accounting for less than one percent of their annual retail sales.
â€œOne of the keys to becoming a leading utility in the country is to be innovative and environmentally sensitive, and this report from Ceres and Clean Edge shows how weâ€™re achieving that in the key area of clean energy,â€ said PG&E President Chris Johns. â€œOur customers want PG&E to provide solutions to the challenge of global warming, while at the same time helping them use less energy and save money. As their local utility, weâ€™re focused on partnering with our customers to develop innovative energy solutions and meeting their needs well into the future.â€
Analyzing 2012 data from nearly a dozen federal, state and industry sources, including the U.S. Energy Information Administration, state Renewable Portfolio Standard annual reports and U.S. Securities and Exchange Commission 10-K filings, the report benchmarked companies on three indicators: renewable energy sales, or the total amount of retail renewable electricity sold, including Renewable Energy Credits retired by the utility; 2) cumulative annual energy efficiency savings, which includes savings from projects that were implemented in prior years and were still saving energy in 2012; and 3) incremental annual energy efficiency savings, or the energy savings from new programs or new participants in existing programs.
â€œThe electric utility industry is entering a period of major transformation as it moves from a rate-regulated industry of monopolies to a market-based competitive system driven by consumer choices. Ignoring this clean energy shift is dangerous for both the traditional utility business and the environment,â€ said Jon Wellinghoff, Partner at Stoel Rives LLP and former Chairman, Federal Energy Regulatory Commission, who wrote the report foreword.
Among the reportâ€™s other key findings:
State policies are a key driver for utility clean energy deployment. Many of the top-performing utilities in both renewable energy sales and energy efficiency savings are based in states and regions with aggressive clean energy policy goals, while utilities delivering less are often based in states with weak support for clean energy. California, for example, ranks high for overall clean energy policies and its utilities (PG&E, Edison International, and Sempra) perform particularly well on both renewable energy and energy efficiency measures. Similarly, utilities perform well in Massachusetts, Oregon and Connecticut â€“ states with strong energy efficiency policies, all of which rank in the top ten states in Clean Edgeâ€™s 2014 U.S. Clean Tech Leadership Index.
Most of the utilities with weaker deployment of clean energy (Southern, Entergy, SCANA, Florida Power and Light, and Dominion) are located in the Southeast, which historically has had weak state level support for clean energy.
â€œState and local governments, large corporate and industrial users, and individual customers are increasingly demanding low-carbon, clean energy sources,â€ said Ron Pernick, Managing Director of Clean Edge, a clean-tech research and advisory firm, which coauthored the report with Ceres. â€œTracking the performance of utilities against this backdrop is critical to understanding how policies, market frameworks, and new economics are impacting the future of electricity generation and consumption.â€
Some other key insights from the report include:
Even among utilities in similar market and regulatory environments there was a range of performance. This suggests that strong state-level polices are not the only factor in utility investment in clean energy. For example, in Ohio, Duke Energy has delivered more cumulative energy savings than other utilities in the state, and in Oklahoma, AEPâ€™s subsidiary has delivered more renewable energy and energy efficiency than OGE Energyâ€™s.
Moving forward, better, more up-to-date data is paramount. Forming a complete and uniform picture of how utilities compare is critical, given the rapid expansion of energy efficiency and renewable energy in the U.S. and the importance of carbon-free renewable generation to this industry. Yet data on utility clean energy deployment is scattered among numerous sources. The report offers specific recommendations on how federal agencies, utilities, regulators and other stakeholders can improve the quality and availability of utility clean energy data.
ABOUT CERES: Ceres is a nonprofit organization mobilizing business and investor leadership on climate change, water scarcity and other sustainability challenges. Ceres directs the Investor Network on Climate Risk (INCR), a network of over 110 institutional investors with collective assets totaling more than $13 trillion. Ceres also directs Business for Innovative Climate & Energy Policy (BICEP), an advocacy coalition of nearly 30 businesses committed to working with policy makers to pass meaningful energy and climate legislation. For more information, visit http://www.ceres.org or follow on Twitter @CeresNews.
About Clean Edge
Clean Edge, Inc., founded in 2000, is the worldâ€™s first research and advisory firm devoted to the clean-tech sector. The company offers a suite of benchmarking services, including clean-energy stock indexes, the U.S. Clean Tech Leadership Index (tracking state and metro activity), and the Benchmarking Utility Clean Energy report with Ceres. Managing director Ron Pernick and senior editor Clint Wilder are coauthors of two business books on clean-tech innovation, The Clean Tech Revolution (HarperCollins, 2007) and Clean Tech Nation (HarperCollins, 2012). To keep abreast of the latest clean-tech trends or learn more about Clean Edge, visit www.cleanedge.com.