American utilities aren’t living up to their climate pledges, new report finds

A damning new report gives American electric utilities failing grades on addressing climate change. Instead of transitioning quickly to clean energy, according to the report, many utilities in the US are propping up aging coal plants and expanding polluting gas infrastructure.

“These companies’ supposed climate commitments are mostly greenwashing,” says the report published yesterday by environmental group Sierra Club and University of California, Santa Barbara associate professor Leah Stokes. In other words, utilities are paying lip service to climate change without doing enough to actually tackle the crisis.

The assessment of US utilities includes 77 operating companies from 50 parent utility companies that generate the most electricity from coal and gas. The report’s authors rated companies based on how much progress they’re making to cut planet-heating emissions from fossil fuels. On a scale of from 1 to 100 — with 100 being stellar environmental performance — the companies’ aggregate score was a low 21, equivalent to a low “D.”

Forty out of the 50 parent companies studied have some kind of goal to reduce their impact on the climate. They scored only marginally higher, earning 23 points out of 100, which the report says “suggests that most utilities’ corporate pledges are not translating into action.”

That shows that utilities haven’t improved much since last year, when they earned an aggregate score of 17 out of 100 points in the first iteration of the report, published in 2021. What’s even more worrisome is that more than a third of companies actually scored worse this year than they did last year, and about a tenth of them made no progress at all.

The scores are based on three main criteria: each utility’s plans to retire coal plants, quit building new gas plants, and install or purchase more clean energy like wind and solar as of July 2022. If you want to know whether your utility made passing or failing grades, Sierra Club has a search tool on its website. Users can type in a particular utility to see how it ranks compared to others in the assessment and what letter grade the company earned, similar to report cards in school with A through F grades.

One of “greenwashing’s worst offenders,” according to the report, is the Tennessee Valley Authority (TVA). It got an F grade, with its score falling from nine points in 2021 to two points this year. The utility has only committed to retiring 3 percent of its coal generation this decade, according to the report. It also has plans to build up more gas infrastructure this decade than all but one of the other parent companies in the assessment.

Meanwhile, TVA’s existing plans to add more clean energy this decade amount to just 19 percent of its existing fossil fuel generation. In an email to The Verge, however, TVA says it has a plan to reduce carbon dioxide emissions from fossil fuels by 70 percent by 2030. “This report does not reflect TVA’s decarbonization efforts as listed in our Strategic Intent and Guiding Principles framework,” TVA senior partner for strategic communications and media relations Ashton Davies said in the email.

Brian Reil, a spokesperson for the Edison Electric Group, an association representing investor-owned utilities in the US, called Sierra Club’s criteria for the report “arbitrary.” But there’s research to back up the standards to which the report holds companies accountable. Landmark assessments from the United Nations and academic researchers have found that economies need to essentially phase out coal by 2030 and quit building new gas infrastructure in order to avoid the worst effects of climate change.

Joe Biden has committed the US to cutting its CO2 emissions at least in half from peak levels under the Paris climate agreement. The linchpin for achieving that goal is a carbon pollution-free power grid, which Biden aims to do by 2035. Not only would a clean grid erase a quarter of the nation’s greenhouse gas emissions that come from electricity, but it can also clean up other sectors if cars, homes, and buildings eventually go all-electric.

The Inflation Reduction Act (IRA) Democrats passed in August includes about $30 billion in grant and loan programs for utilities to transition to clean electricity. While the IRA was a massive piece of climate legislation, the tedious negotiations that led up to the budget reconciliation bill becoming law ultimately axed a key provision that would have set a “clean energy standard” for utilities. Without a strong federal mandate to push utilities to clean up their acts, it’s up to state and local governments — and individual companies — to set the pace for their clean energy transitions.