Governors' Wind Energy Coalition

The industry, he said, “gets where it’s going,” but may not be moving fast enough.

“If you’ve noticed, with the announcement of the EPA rule, you’ve really heard very little pushback from the power sector. You’ve heard a lot from the coal industry,” he said. Utilities “understand the age of their coal plants, and in a sense, this new regulation recognizes the inevitability of shutting down old coal plants.”

Rogers said he worked hard at Duke “to prepare us,” adding that the utility now has a renewable business and is trying to position itself to do “solar on the rooftop outside the business.” Rogers said Duke is also involved in storage and has for years been considering the price of carbon and shifting its energy mix.

By 2015, coal could make up only a third of Duke’s total generation, he said.

But Rogers expressed some concerns about the EPA rule, pondering whether it could halt research on coal and prompt a fast and ill-considered rush to gas. He also urged the electric industry to tackle the daunting task of pushing through a corporate and regulatory overhaul of the U.S. utility sector by 2050.

“My No. 1 fear with this is the government stops all investment in research and development for coal,” Rogers said. “That would be a travesty because as the Saudi Arabia of coal … we will be taking that off the table in a world where we don’t know what the gas prices are going to be, we don’t know the future of nuclear, and to be overly dependent on gas, to me, is a huge risk and it has 50 percent of the carbon footprint of coal.”

Rogers repeatedly warned against “all gas, all the time.”

The U.S. utility sector, he said, is facing “anemic to declining” demand and rising prices in coming decades, and must invest in the electric grid — new nuclear facilities, distributed generation, renewable energy and storage technologies — and avoid overreliance on natural gas, which has a history of wild price swings.

“The gas industry has a history of volatility, and if anybody thinks that volatility’s going to go away, I don’t know what they’re smokin’. Maybe I need it,” Rogers said. “The reality is, I don’t think that’s the future.”

He warned against leaning on gas to replace the country’s nuclear reactors — which produce 70 percent of the United States’ carbon-free electricity. Rogers noted that the national nuclear fleet is aging and there’s an “open question” and “low probability” as to whether the Nuclear Regulatory Commission will allow reactors to operate up to 60 or 80 years.

“If you replace it with gas, emissions are going to go up, and we’re going to look just like Germany,” he said. “When Germany shut down their nuclear plants, and now they’re buying coal … their actual CO2 emissions are rising.”

Rogers reiterated his calls for the industry to work through politics and regulators to change the current financial and regulatory structure, noting that the United States will replace every plant — except for hydropower — by 2050.

But he also acknowledged that such a feat will be “damn hard” because regulators are conservative and reluctant to change, and “where the real change needs to occur is in the Legislature.”

“You’re not going to change then in one legislative session; it’s going to take five or six or seven,” he said, adding that lawyers have a vested interest in maintaining the current regulatory structure. “You’re going to need to go into the legislative sessions with the capability to satisfy all those people that are going to be at the trough.”

As for storage, Rogers said the government must drive the push to accelerate expansion — and a good place to start is states with renewable portfolio standards. Much of the storage in the United States by 2020 will have been driven by federal policy mandates, he added.

“That’s going to the Legislature .. at a period when a lot of states are trying to walk away from the [renewable portfolio] standards, or modify or reduce them,” he said.