Making Sense of Utility Carbon-Reduction Targets December 9, 2021 | By Rusty Haynes & Trevor Gibson Over the past three years, a growing chorus of U.S. utilities and utility parent companies have announced, expanded or accelerated long-term targets for reducing carbon emissions. These targets span from commitments to achieve a carbon-free power supply by 2030, to plans to achieve net-zero emissions by 2050. Given the range of industry terminology and nuanced target details, it is challenging to accurately assess the current state of utility targets. Recognizing the need for a consolidated tracking resource, SEPA launched the Utility Carbon-Reduction Tracker™ in 2019. This tool serves as the go-to source of data and information on the state and scope of utility carbon-reduction targets. Utilities use it as a benchmarking tool to assess their own targets against industry peers’. Financial analysts refresh the tracker to evaluate utility commitments. Solution providers, reporters, non-profits, researchers and government officials also visit regularly. Tracker 2.0 Building on insights from users of the Utility Carbon-Reduction Tracker, SEPA recently launched several enhancements. First, the tracker now differentiates targets adopted by individual utilities from those adopted by utility parent companies. This distinction is significant because targets, especially net-zero targets, adopted by utility parent companies typically apply to the parent company’s overall emissions, and it is common for utility parent companies to own other types of companies in addition to electric utilities. As such, all individual utilities owned by the parent aren’t necessarily bound by or expected to achieve the parent’s stated target. By comparison, it is much easier to determine the expected impact of a target adopted by an individual utility. Second, the tracker now separates voluntary utility targets from state-level 100% requirements. It’s important to understand which utilities have voluntarily committed to carbon reduction, and which are fulfilling a state-level 100% carbon-free or net-zero requirement. Motivations for adopting a voluntary target include economic opportunity; financial, political and public pressure; and a sincere recognition that carbon reduction is “the right thing to do.” Some major utilities subject to a state-level 100% requirement have adopted a voluntary target that exceeds the state requirement. For example, the Sacramento Municipal Utility District (SMUD) and the Los Angeles Department of Water and Power (LADWP) are aiming to achieve targets ahead of California’s statewide requirement that all retail sales of electricity to end-use customers come from 100% “renewable energy resources and zero-carbon resources” by 2045. SMUD has committed to reaching a zero-carbon power supply by 2030, and LADWP is targeting a 100% renewable and carbon-free power grid by 2035. In New York, where state law requires the “statewide electrical demand system” to be free of greenhouse-gas emissions by 2040, the New York Power Authority has committed to reaching 100% carbon-free electricity by 2035. The Science Based Targets initiative (SBTi), launched in 2015, was established by CDP, the United Nations Global Compact, the World Resources Institute and the World Wide Fund for Nature to support companies as they develop targets to transition to a zero-carbon economy. The SBTi uses criteria backed by climate science to validate corporate commitments to emissions reduction, ensuring they are in alignment with the Paris Agreement’s goal of limiting global warming to well below 2°C. Public Service Enterprise Group (PSEG), Hawaiian Electric, and National Grid PLC are examples of utilities or utility parent companies with electric distribution service operations in the United States that have committed to a science-based target under SBTi. Additional information on committing to a science-based target is available here. Third, users can now easily differentiate targets by category, including: Targets aiming to achieve 100% renewable energy, clean energy, emissions-free energy or carbon-free energy. This is the most direct approach to full carbon reduction. Targets aiming to achieve net-zero emissions or carbon neutrality. This approach is less direct, but it allows greater flexibility in terms of how the target can be achieved. Targets aiming to achieve partial or relative carbon reduction (i.e., less than 100%), compared to a baseline year. Fourth, SEPA enhanced the data visualization. The tracker now offers three interactive, color-coded maps which display service territories or jurisdictions for utilities and utility parent companies, for distribution utilities, and for state-level 100% requirements. Filters allow users to sort the data by various criteria, including utility type, target type and target attainment year. Additional features include an enhanced, downloadable public dataset, summaries of interim targets, a list of recently-announced targets, a dashboard of easy-to-digest factoids derived from project data, and a new FAQ and methodology section. Notable findings The Utility Carbon-Reduction Tracker includes data on more than 300 industry targets that apply to individual utilities, whether voluntary or mandatory, or to utility parent companies. Some findings are presented in the figures below. The SEPA Utility Carbon-Reduction Tracker is constantly evolving. The SEPA team is scoping additional project enhancements, including expanded analysis, detailed data on interim targets, a timeline depicting the evolution of targets, a library of primary documents, and information on whether targets align with industry standards. As the industry coalesces to address the climate crisis and begins to look towards tackling historical emissions, SEPA may be able to create a future category that covers negative or net-negative emissions targets. The tracker also serves as a major component of the SEPA Utility Transformation Challenge, a comprehensive, honest assessment of U.S. electric distribution utilities’ progress towards a modern, carbon-free energy system. View the 2021 Utility Transformation Profile for top trends and challenges of utility transformation in four areas: Clean energy resources Corporate leadership Modern grid enablement Aligned actions and engagement Share Share on TwitterShare on FacebookShare on LinkedIn About the Authors Rusty Haynes Manager, Research & Industry Strategy Rusty joined SEPA as manager of research and industry strategy in 2020. He serves as staff leads for SEPA’s Customer Programs Working Group, is a primary contributor to SEPA’s Utility Transformation Challenge and SEPA’s Utility Carbon-Reduction Tracker, and coordinates responses to SEPA members’ research requests, among other project work. Prior to joining SEPA, Rusty served as a policy research manager at EQ Research, where he tracked and analyzed state-level legislative and regulatory developments relevant to solar, battery storage, EVs, and other DERs for industry, non-profit, and government clients. He also served for seven years as manager of the DSIRE project — the nation’s most extensive public database of financial incentives for clean energy — at NCSU. Rusty received an M.A. from UNC-Chapel Hill. Rusty has traveled to 40 countries. Trevor Gibson Analyst, Research & Industry Strategy Trevor joined SEPA in August 2019 after having worked as a research assistant on SEPA’s Utility Market Snapshot Series. In his role, Trevor helps support SEPA’s Utility Transformation Challenge, along with a range of other research projects, including co-leading SEPA’s Utility Carbon-Reduction Tracker. Prior to joining SEPA, Trevor attended the University of Maryland, College Park, where he received his B.S. in Environmental Science and Policy in 2017 and his MPP in International Security and Economic Policy in 2018. In his free time, Trevor enjoys spending time outdoors, cycling, and rooting on his favorite sports teams. He is a devout University of Connecticut basketball fan.