Most Utilities That Pledge “Net Zero by 2050” Are Doing Little To Achieve That Goal
Like many utilities, Southern Company, the second-largest gas and electric company in the United States, has a “net zero” climate pledge. A page on its website features gleaming solar panels pointing toward a blue sky, where the utility acknowledges the importance of the Paris Agreement. “Key to Southern Company’s environmental initiatives,” the company offers, “is a net-zero transition focusing on greenhouse gas emissions reductions, decarbonization, and a Just Transition.”
Apparently, Southern Company’s green energy keywords haven’t translated into actual policy. All the company’s subsidiaries—Alabama Power, Georgia Power, and Mississippi Power, which together serve 9 million customers— get an F on a national report card tracking the progress of their plans to transition away from fossil fuels, according to The Dirty Truth About Utility Climate Pledges: 2023 Annual Report.
This is the third annual analysis from the Sierra Club assessing whether electricity companies are meeting their “net zero by 2050” commitments, or whether those commitments are just an exercise in greenwashing. The analysis examines 77 utilities across the country and their plans (if any) to retire coal plants and stop the construction of new fracked gas plants. The score card also measures how successful utilities have been in replacing high-polluting sources of energy with clean sources such as wind and solar.
“The utility industry is not moving at the pace that’s necessary to respond to the climate crisis."
According to the latest findings, while many electricity utilities publicly embrace notions such as decarbonization and a just transition, their actual investment decisions reveal an industry staunchly defending a dirty energy status quo.
“The utility industry is not moving at the pace that’s necessary to respond to the climate crisis,” Leah Stokes, an energy analyst, said. “They still don’t have adequate plans to retire dirty coal plants, stop building gas plants, and build new clean energy. That’s what we know they have to do, and they are delaying the clean energy transition.”
The United States cannot meet its Paris Agreement commitments to cut greenhouse gas emissions without a transition to clean energy in the nation’s power sector. That sector ranks second in total greenhouse gas emissions—after transportation—and is responsible for approximately a quarter of the nation’s emissions. A business-as-usual scenario directly undermines the systemic transition to clean energy sources that climate scientists say must happen without further delay.
But delay appears to be most utility companies’ standard operating procedure. The report gives a collective D to the 77 companies studied. Of those 77 companies, 33 either did not make any progress at all in achieving their clean energy commitments or actually moved backward and received a lower score than last year. Of the companies that have a climate goal, only one—NiSource, the parent company of Northern Indiana Public Service company—received an A.
One of the biggest changes to take place between the 2022 and 2023 Dirty Truth reports was the passage of the Inflation Reduction Act. The act made billions of dollars available to utility companies through tax credits and other incentives to help them transition to renewable sources of energy. Many of those companies, the analysis makes clear, have not updated their plans and investment decisions in response. They continue to invest more in public displays of embracing clean energy instead of embracing the IRA’s clean energy incentives to help them make that transition.
"To get a D on your plans for clean energy transition right now, even after the Inflation Reduction Act and the overall market trends we’re seeing—the declining cost of solar, the declining cost of batteries, the new opportunities and continued low cost of wind, new opportunities opening up on geothermal—is inexcusable," said Sachu Constantine, executive director of Vote Solar. "All those opportunities are there, and yet they are building more fossil fuel plants."
Sixty-five percent of the utilities operating coal plants have no plans to shut down coal this decade, according to the analysis. Coal is one of the dirtiest forms of energy. Burning coal releases a variety of pollutants such as carbon dioxide, sulfur dioxide, nitrogen oxides, and heavy metals that foul air and water, impact public health by contributing to higher incidents of respiratory illness and disease, and supercharge the climate crisis. Gas plants, which are often touted as being cleaner than coal plants, are just as polluting. The extraction, production, and combustion of fracked gas is a large source of methane, which is approximately 80 times more powerful at warming up the climate over a 20-year timescale than carbon dioxide.
“Scientists have been saying for years now that we can’t build any new fossil fuel infrastructure and limit warming to 1.5°C,” Stokes said. “So the utility industry’s plan to build new gas plants is completely out of line with what science tells us is necessary.”
Cleaner sources of energy are also cheaper for the companies that manage them, and therefore cheaper for their customers. According to a separate report released earlier this year by Energy Innovation, 99 percent of the existing coal fleet in the United States is more expensive to run than it would be if it those facilities were replaced with solar or wind.
The Dirty Truth offers detailed case studies demonstrating how utility companies greenwash their image through publicly embracing net-zero pledges in principle and then continuing to burn fossil fuels. Duke Energy Corporation, for example, owns five utilities, including Duke Florida, Duke Indiana, and Duke Carolinas. Like Southern Company, Duke has a Climate Change page on its website describing how its “bold steps today lead to a cleaner energy future for you.” The Dirty Truth gives Duke a D and three of its subsidiaries an F for progress on transitioning to clean energy. It’s a slight improvement—in last year’s report, the company received an F. Duke has the most coal capacity out of any parent company in the United States, with over 17,000 megawatts of coal online, and has plans to retire only 30 percent of that fleet by 2030. It also has plans to build new gas plants.
Climate denialism continues to be rampant in the industry. In the case of Southern Company, its CEO Tom Fanning has publicly questioned whether human activity is driving climate change. And the trade association that represents all energy utilities and their interests nationwide, the Edison Electric Institute, recently appointed Dan Brouillette as president and chief executive. Brouillette served for two years as the secretary of energy during the Trump administration; in 2020, he said that he didn’t know if the science of climate change was settled.
"The time for empty promises has passed."
Although most utilities are receiving D's and F's in this report, there are a few standout companies showing what authentic progress can look like. Northern Indiana Public Service Company has a plan to retire its coal plants and replace most of the power in its system with clean energy. And Xcel Energy in Minnesota, which has consistently received an A in these reports, continues to top the overall list of companies following through on clean energy commitments.
“We need other companies to put their money where their mouths are,” Stokes said. “I don’t understand how you can think you are a responsible company if a massive law passes like the Inflation Reduction Act, giving billions of dollars to help utilities build clean energy, and you don’t think you need to change your plans. That just doesn’t make any sense.”
"There aren't enough words to describe how critical this moment is with respect to climate change," Constantine said. "The time for empty promises has passed. Greenwashing is no longer acceptible. We have to move to action."
Jonathan Hahn is the Managing Editor of Sierra magazine, covering climate change, environmental justice and politics, global trade, energy, and public health.