Utilities move ahead on climate despite postponement

Despite the U.S. Supreme Court’s decision to put President Obama’s climate change initiative targeting power plants on hold, some of the country’s largest utilities are moving ahead to comply anyway.

Executives from American Electric Power and Xcel Energy both said regardless of whether the president’s clean power plan holds up in court, they believe in the years ahead a federal crackdown on carbon emissions is coming.

“We think there’s going to be some legal issues, but we’re still moving ahead to figure out the best way to comply,” Scott Weaver, manager of strategic policy analysis at AEP, said at the HIS CERAWeek conference in Houston Thursday. “Carbon regulation is not going away.”

The decision by some utilities to move ahead comes even as states like Texas and West Virginia, which led the legal opposition to the president’s plan, take the supreme court’s ruling as a sign the rule will ultimately be struck down.

Toby Baker, a commissioner on the Texas Commission on Environmental Quality, said the state was now in a “holding pattern” on whether to work to comply with the rule.

“I’ve watched states get in front of their skis on federal regulations, and then the regulations come out and they don’t match,” he said. “I do feel like the [clean power plan] will change from what it is right now.

States including Massachusetts, Arizona and Virginia have said they will move ahead despite the stay.

In Ohio, state officials have for now put on hold analysis of how they could comply. But they were already close to completion, said Ohio Public Utility Commissioner Asim Haque.

“The stay puts us in a funny position,” he said. “We will be prepared if it moves ahead.”

For utilities that operate across multiple states, the fact the White House has left open the method of compliance to states poses a challenge for planning.

For example, Xcel must balance policies in Minnesota, which leans toward expanding clean energy, against those in Texas, where the company powers oil and gas drilling operations, said Jack Ihle, director of environmental policy and emerging technology.

“Federal legislation would be far preferable,” he said. “Back in 2008, when Congress was considering cap and trade, you will remember the states didn’t have to do much.”