The report concludes that since 2000 emissions of all four major pollutants have dropped while total electricity generation and the American economy have grown.

Given the importance of revising the utility industry model for the benefit of customers, society and utility investors, this paper is an expression of Peter H. Kind's evolved views in an effort to find common ground that will support a robust 21st Century Utility model.

This report examines and compares the stack air pollutant emissions of the 100 largest power producers in the United States based on their 2013 generation, plant ownership, and emissions data. The report focuses on four power plant pollutants for which public emissions data are available: sulfur dioxide (SO2), nitrogen oxides (NOx), mercury (Hg), and carbon dioxide (CO2). These pollutants are associated with significant environmental and public health problems, including acid deposition, global warming, fine particle air pollution, mercury deposition, nitrogen deposition, ozone smog, and regional haze.

Key findings of the report include:

• Air pollution emissions from power plants are highly concentrated among a small number of producers.  Among the 100 largest generators:
• Five (Duke, AEP, Southern, NRG, and MidAmerican) generate 25 percent of CO2 emissions, though Southern has seen a significant decline in emissions (27 percent) since 2000, and Duke has seen a 10 percent decline in its emissions rate even after its recent merger with Progress Energy.
• Three (AEP, Southern, and NRG) generate nearly 25 percent of SO2 emissions.
• SO2 and NOX emissions in 2013 were 80 percent and 74 percent lower, respectively, than they were in 1990, when major amendments to the Clean Air Act were passed.
• Mercury emissions have decreased 50 percent since 2000, when the industry was first required to report their mercury emissions to EPA.
• Coal accounted for 40 percent of the power produced by the top 100 power producers, followed by natural gas at 26 percent, nuclear at 22 percent, and renewable power, including large hydroelectric, and other at 14 percent.
• The utilization, or capacity factors, of coal plants continues to decline relative to natural gas plants, with coal plants’ average utilization rates declining from 73 to 61 percent, and natural gas plants increasing their utilization from 40 to 48 percent between 2008 and 2014.

This 2014 update to Ceres' 2012 report, Practicing Risk-Aware Electricity Regulation: What Every State Regulator Needs to Know, looks at key trends that continue to reshape the U.S. electricity industry, analyzes changing costs and risk profiles of energy resources (especially renewable energy), and offers further insights and recommendations for smart, “risk-aware” decision-making by utility regulators.

This report, authored by utility industry and finance experts, concludes that almost without exception the riskiest investments for utilities—the ones that could cause the most financial harm for utilities, ratepayers and investors—are large base load fossil fuel and nuclear plants. In contrast, energy efficiency, distributed energy and renewable energy (whose costs, in some cases, have come down dramatically since 2012) are seen as more attractive investments that have lower risks and cost.

This 2014 Update reaffirms the conclusions and recommendations from our 2012 report, which emphasized the need for intelligent risk management practices by utility regulators in overseeing utility investment.

Key findings of the report include:

• NOx and SO₂ emissions in 2012 were 74 percent and 79 percent lower, respectively, than they were in 1990 when Congress passed major amendments to the Clean Air Act. Mercury emissions decreased 51 percent since 2000.
• CO₂ emissions have decreased in recent years, declining 13 percent between 2008 and 2012. Energy efficiency improvements, displacement of coal generation by natural gas and renewable energy sources, and slower economic growth all contributed to the decline.
• Coal accounted for 39 percent of the power produced by the 100 largest companies in 2012, down from 44 percent in 2011. Roughly 18 percent of the nation’s coal-fired generating fleet (over 58,000 megawatts) has been slated for retirement since 2010. Retiring coal plants tend to be older and smaller than the industry average. Also, average utilization of coal plants (how often the plants are run) has dropped from 73 percent in 2008 to 60 percent in 2013.
• Across the entire electric sector, renewable energy electricity generation increased 31 percent since 2010 (by more than 50,000 gigawatt hours) even as total electricity generation declined modestly.

Benchmarking Air Emissions is the 10^th in a series highlighting environmental improvements and progress in the nation’s electric power sector since 1997. The 100 power producers evaluated in the report represent 86 percent of the electric power generated in the U.S. and 87 percent of the industry’s pollution. Based on 2012 generation and emissions data from the U.S. Energy Information Administration and the EPA, the report is a collaborative effort between Ceres, Bank of America, four power producers (Calpine, Entergy, Exelon and Public Service Enterprise Group (PSEG)) and the Natural Resources Defense Council, and is authored by M.J. Bradley and Associates.

In 2010 world governments agreed to limit the increase in global temperature to two degrees Celsius (2 °C) above pre-industrial levels to avoid the worst impacts of climate change. To have an 80 percent chance of maintaining this 2 °C limit, the IEA estimates an additional $36 trillion in clean energy investment is needed through 2050—or an average of $1 trillion more per year compared to a “business as usual” scenario over the next 36 years.

These new investments in clean energy—including renewable energy such as solar, wind and geothermal, energy efficiency and energy smart technologies such as power storage, fuel cells and carbon capture and storage—will provide multiple benefits. In addition to cutting greenhouse gas emissions in half by 2050, such investment will yield significant returns in the form of reduced fuel costs. Total fuel savings are an estimated $100 trillion between 2010 and 2050. Moreover, the greater job-creation potential of energy efficiency and renewable energy relative to fossil fuels makes clear that quadrupling annual global investment in clean energy will create millions of new jobs worldwide.

Download the full report here.

This Ceres report provides 10 recommendations for investors, companies and policymakers to increase annual global investment in clean energy to at least $1 trillion by 2030—roughly a four-fold jump from current investment levels.

Industry analysts have estimated the potential energy efficiency investment opportunity in the hundreds of billions of dollars. However, under current market conditions, institutional investors are largely unable to finance energy efficiency projects at the scale necessary to address climate change or to meet their own internal investment criteria. At sufficient size, a market for energy efficiency loans could present an attractive investment opportunity for institutions.

Based on the latest available data, the report also reveals that Wyoming, Kentucky, West Virginia, Indiana, and North Dakota had the highest CO2 emissions per megawatt-hour of power produced, while Idaho, Vermont, Washington, Oregon, and Maine had the lowest CO2 emissions rates. Nationwide, five power producers—American Electric Power, Duke Energy, FirstEnergy, Southern Company, and Tennessee Valley Authority—generate 25 percent of overall electric sector CO2 emissions, though some of these producers and others have significantly reduced emissions in recent years.

The Benchmarking Air Emissions report is the ninth in a series highlighting environmental performance and progress in the nation’s electric power sector.

The 2012 Benchmarking report is the eighth report in a series highlighting environmental performance and progress in the nation’s electric power sector. The report is based on 2010 generation and emissions data from the Energy Information Administration and the Environmental Protection Agency, and also includes analysis of preliminary 2011 emissions data. The previous edition reported on 2008 data.

For more about this issue, listen to the Ceres Podcast episode with report author Ron Binz, former chairman of the Colorado Public Utility Commission and principle of Public Policy Consulting.