CEO: Utilities will ‘blow right past’ Clean Power Plan goals

Source: Jeffrey Tomich, E&E News reporter • Posted: Monday, April 1, 2019

The CEO of a major Midwest utility said his industry won’t wait to see how the legal skirmish over the Obama administration’s landmark climate rule plays out

“The industry is going to blow right past the Clean Power Plan,” DTE Energy CEO Gerry Anderson said in a press briefing yesterday.

The Detroit-based utility, which has 2.2 million customers, will accelerate plans to slash carbon emissions, achieving an 80 percent reduction by 2040 compared with a 2005 baseline, Anderson said. That’s a decade earlier than the target established just two years ago following President Trump’s election (Energywire, May 16, 2017).

The announcement came as part of DTE’s integrated resource plan (IRP) to be filed tomorrow with the Michigan Public Service Commission. The long-range plan, required under state law, outlines how the utility will meet electricity demand over the next 15 years.

DTE joins a growing list of utilities such as Xcel Energy Inc. that are quickening the pace of plans to retire aging coal plants and replace them with cleaner alternatives (Energywire, Dec. 7, 2018).

The shift is happening despite the Trump administration’s efforts to rescue the coal industry by rolling back environmental regulations.

DTE also laid out intermediate carbon-reduction goals, including a 32 percent cut by 2030 and a 50 percent reduction by 2030, compared with a 45 percent goal laid out in 2017.

“We’re achieving the CPP goal by 2023 and are far ahead of it by 2030. What’s driving it really is the evolution and the economics of energy,” he said. “We’re simply moving faster.”

Still, the company isn’t ready to commit to eliminating carbon pollution entirely like Minneapolis-based Xcel, which committed to 100 percent clean energy by 2050.

Anderson said the wind resources in Minnesota and Colorado — two of Xcel’s primary markets — allow the utility to ramp up renewable energy at a faster rate. And still, Xcel has been clear that it’s counting on technology advances to meet its long-term emissions target.

DTE said it will achieve the cuts by closing its Trenton Channel and St. Clair coal-fired power plants in 2022 instead of 2023. The energy and capacity from retired coal plants, which represent about 15 percent of DTE’s energy mix, will be replaced with a combination of natural gas, renewables and energy efficiency.

The Michigan utility plans to double its renewable energy capacity over the next five years with additional investments beyond that. It will also develop more renewables or corporate customers under a “green tariff” and bump its annual energy efficiency savings target from 1.5 percent annually to 1.75 percent — significantly above the 1 percent required by state law.

Anderson said the focus of the IRP is “dominantly on the first five years” while longer-range plans are more likely to be driven by the pace of technological advances.

Longer-term, the company outlined four scenarios, any of which would allow it to achieve its carbon targets. Two include development of another natural gas-fired power plant in addition to the $1 billion Blue Water Energy Center being built just northeast of Detroit.

Anderson said if he had to guess what the company’s energy mix will look like at midcentury, he’d say DTE would be 50 percent renewables, 20 percent nuclear and 30 percent natural gas.

The utility’s only nuclear plant, Fermi 2, went online in 1985 and is currently licensed through 2025. DTE has a 20-year license extension pending approval by the Nuclear Regulatory Commission.

Anderson acknowledged that new nuclear generation isn’t cost-competitive with wind and solar. But the CEO said nuclear is critical to meeting the climate goals laid out in the Paris climate agreement, and he’s hopeful that advances in technology, including small modular reactors, can keep nuclear energy an option.

Anderson isn’t bullish on the Green New Deal. In Washington, D.C., earlier this month, he met with a group of “core Democrats interested in climate change issues” and said they didn’t see the ideals laid out in the plan gaining traction.

“While it’s getting a lot of air time, there aren’t many that think it’s really the practical solution to the problem,” he said.

Anderson also didn’t view mandates as necessary for the electric industry to achieve emissions reductions. But he suggested federal requirements might be needed to achieve carbon emissions from tailpipes and buildings.

“Do I think a mandate might be necessary for the entire country to get there? Probably so,” he said.