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Utilities and the Duty of Social Equity

NFI Industries is a freight transit company with a special relationship to the Los Angeles area – most of their west coast activity is concentrated in the region. Like many of their peers, NFI facility locations and freight transit routes pass through impoverished and disadvantaged communities with large minority populations. As a result of these industrial transit corridors and other co-located industries, these predominantly Hispanic and Asian communities suffer from significantly poorer air quality compared to mostly white and affluent neighborhoods in the area. Making matters worse, the people who call these communities home lack the economic and social resources to improve their environment or shelter themselves from its effects.

Through Volvo LIGHTS, NFI, Southern California Edison (SCE), and Volvo teamed up to create a fleet electrification pilot that addresses the climate and environmental vulnerabilities of these communities and the wider south coast area air quality. The unique collaboration aims to pioneer a range of vehicle, charging and workforce development innovations critical for the commercial success of battery electric trucks and equipment. Volvo recently deployed its first pilot VNR electric truck between Fontana and La Mirada, California, and NFI Industries will begin piloting electric trucks for full operations in their regional routes later this summer.

Volvo VNR electric trucks. Source: Volvo LIGHTS

Southern California Edison provided critical support for Volvo and NFI Industries through siting and integration support. In a recent webinar, Volvo and NFI lauded the involvement of SCE as critical to the project’s success. Volvo and NFI did not possess the necessary in-house expertise to ensure the sites they were investigating could handle the expanded infrastructure capacity. Importantly, the project expects to remove 3.57 tons of air pollutants and 3,020 tons of greenhouse gases annually, and vastly improve the quality of life for the predominantly Asian and Hispanic communities near NFI facilities and routes.

Utilities’ Responsibility to Their Communities and Social Equity
The Volvo LIGHTS project illustrates the need for utilities to incorporate social equity into their understanding of their traditional responsibilities: to provide safe, affordable, and reliable energy to their communities. For utilities seeking to achieve carbon reduction and grid modernization, social equity is taking and must take center stage. As with many societal changes, minority communities are often the last to reap the benefits and first to feel the repercussions.

Recent studies from Yale and George Mason University show heightened alarmist sentiment towards climate change among racial minorities when compared to their white, non-hispanic peers.

This unfortunate fact is compounded by a significant sense of alarm about climate change in minority groups. The disparity in climate sentiments between minorities and their white counterparts (shown above) is a result of the economic and environmental vulnerabilities that communities of color and other groups face throughout the United States. In the U.S., minority and indigenous communities often live in locations that make them particularly vulnerable to the negative impacts of climate change, including rising sea levels, increased severe storms, and worsened air pollution. While the industry tackles incorporating these vulnerabilities into their environmental, societal, and governance (ESG) planning strategies, several utilities are taking steps to confront this challenge.

Navajo Tribal Authority Utility: Ground Zero for the Social Inequity of the Climate Jobs Crisis
In 2018, Navajo Tribal Utility Authority (NTUA) won a SEPA Top Ten Award for their 27.3 MW Kayenta Solar Project that brought training and 270 jobs for Navajo and Hopi Tribe members living in an economically ravaged community. The NTUA is responsible for providing power service to a region the size of West Virginia that faces an average unemployment rate around 42%, and where approximately 4% of residents don’t have access to electricity. On top of this devastating unemployment, NTUA faces a challenge shared by other utilities across the nation – as their sole coal-fired power plant shuts down, how will approximately 400 newly unemployed Navajo natives make a living?

Navajo Tribal Utility Authority accepting their 2018 SEPA Top 10 Award at the SEPA Utility Conference.

Recognizing the need for socially conscious planning and equal access to the economic benefits of the carbon-free transition, Salt River Project (SRP) and Los Angeles Department of Water and Power (LADWP) are looking for ways to help.

To meet Los Angeles’ ambitious green energy goals, the city council has directed LADWP to investigate procuring renewable energy, such as wind and solar, generated on Navajo tribal lands. SRP, which also held a stake in the local coal-fired generation plant, has offered jobs to all plant workers affected by the closing, retraining and deploying them to other projects in Arizona.

What has yet to be determined is what the Navajo and Hopi locals working in the neighboring Kayenta coal mine will do now that the coal plant is closing. The Kayenta mine solely supplies the local coal plant, and 80% of Hopi Nation annual revenues are derived from coal operations.

Racial Minorities Will Be Left Behind by The Clean Energy Transition If We Don’t Act 
These two examples illustrate the environmental and jobs impact of the evolving generation mix. Utilities are caught between a rock and a hard place: knowing and working to mitigate the detrimental effects of carbon-intensive generation, while realizing that without proper support and strategy, the economic disruption of changing the generation mix will cause immediate harm to the communities they’re bound to serve.

As we accelerate towards a carbon-free energy future, utilities will need the assistance of solution providers and local and state governments to provide effective community programs that help retrain the displaced workforce and provide placement equity that gives equal opportunity to minority applicants. By doing so, utilities will gain greater community support for new programs and ensure that minority voices have a seat at the table in the energy transition.

Additional Examples
The rural Washington town of Tenino mirrors many rural and exurban communities in the United States. The broader Centralia region of Washington state has been affected by the decline of the traditional logging and agricultural economy, and the impending closure of the Centralia coal plant in 2025. Facing this change, Tenino is choosing to prepare current and future energy workers for new opportunities through active participation in the Tenino Innovation and Education through Renewables (TIER) Project. Tenino will serve as a regional leader by hosting clean energy infrastructure projects and industry workforce training programs. Learn more about the 2019 SEPA Visionary Power Player of the Year.

Xcel Energy is also working with local communities near its coal plants to help them transition when plants are retired. In Pueblo, Colorado, for example, Xcel has received approval to retire two of three coal-fired plants, but is “wrapping its arms around the community” with economic incentives – such as a fixed-rate electricity contract with a local steel mill – to ensure a net increase in jobs.