Power utilities are making future plans with an eye toward coming Trump administration climate rule rollback. Demand is surging, and decarbonization goals are no longer in the driver’s seat.
But an examination of power providers’ planning documents shows they aren’t ruling out the possibility of a future administration launching new climate change regulations.
The Trump administration aims to prevent future presidents from using the Clean Air Act to curb greenhouse gas emissions from the power sector. A final repeal of Biden-era power standards is now under White House review, and EPA is expected to soon transfer a supplemental proposal designed to make it impossible for a Democratic administration to use the landmark law to regulate power plant climate pollution.
Formal filings by the companies that supply electrons to the nation’s power grid show the sector expects the Biden-era mandates for carbon capture and storage to go away. But in evidence is also a more complex consideration of whether some federal curbs on carbon might eventually join the policy landscape.
Nearly all utilities have done an about-face on plans to comply with the Biden administration’s 2024 standards, said Jon Rea, a senior associate on RMI’s electricity team who tracks so-called integrated resource plans. The plans act as blueprints for how utilities will meet demand in decades to come.
“They’re just presuming that it won’t be implemented or required in the future,” Rea said.
A cursory look at the number of new gas plants proposed in 2025 and 2026 indicates that utilities no longer expect the Biden rule’s more stringent long-term requirements to kick in — that is, that new units start capturing 90 percent of their carbon by 2032 or run below 40 percent capacity. Such a requirement would have made those investments less cost-effective.
“The thing that you can objectively observe is the amount of power plants that are being announced and planned within service dates in the next two to five years is increasing,” noted Mike O’Boyle, director of electricity policy at Energy Innovation.
“What the market is showing is that someone is willing to underwrite and finance and construct and build these projects,” he said.
But while EPA has cast the repeal of those greenhouse gas standards for coal- and new gas-fired power as giving electricity providers more certainty to make investments, resource plans list federal and state regulatory policy as a key source of uncertainty.
Power providers have seen two decades of “regulatory whiplash” in which a Democratic administration implements climate rules only to have them jettisoned by a Trump EPA, noted Seth Feaster, an analyst with the Institute for Energy Economics and Financial Analysis.
“They feel like they’re entering a new period of policy uncertainty, because I don’t think any of them are sure that this administration’s policies are going to last beyond the administration,” he said.
“And that’s a real risk when you’re building an asset that’s costing billions of dollars and supposed to last decades,” he said. “So, they haven’t forgotten about policy risk at all.”
Climate regulation doesn’t play the dominant role in utilities’ integrated resource plans that it did in the two years after the Biden EPA proposed its power plant standards, experts say.
Those plans are intended to give state regulators a snapshot of the factors that might pose risks to utilities’ investments, and thus to the ratepayers who might ultimately pay for them.
In 2023 and 2024, Rea said, utilities’ plans reflected a high level of certainty that Biden rules would compel them to shutter coal plants by 2032 to avoid retrofitting with CCS or co-firing with gas. Since Trump’s re-election, though, utilities have often come under federal pressure to keep their old coal plants operating longer, rather than shutting them down.
And most utilities are no longer including climate regulation in their plans’ base cases that reflect the greatest risk factors — or even in “alternative” scenarios that indicate a moderate level of concern.
“For power companies, the risk of future greenhouse gas regulation is not one of their primary concerns right now,” said Jeff Holmstead, who served as EPA’s air chief in the George W. Bush administration. “They mostly focused on permitting and building enough new generation and transmission to meet the sharp increase in demand that has taken everyone by surprise.”
But that doesn’t mean climate regulation concerns are entirely absent.
Take Duke Energy’s 2025 integrated resource plan for North and South Carolina.
On the one hand, it said EPA’s proposed repeal of the Biden-era CCS requirements would “help to enable flexibility for existing coal and new natural gas facilities.” On the other, the Duke subsidiaries say they “continue to closely monitor the changing policy and regulatory landscape, recognizing that federal policy can shift quickly and impact planning decisions.”
But there is variation in how electric utilities appear to be treating EPA’s upcoming repeal of the Biden rules, even among subsidiaries of the same company that may operate in different states.
Duke Energy Kentucky is working on its 2027 plan, and recent meeting notes show that the utility is also considering a scenario in which EPA sets a new rule in 2030 that forces coal plants to retire and gas plants to retrofit with carbon capture and storage by 2037.
Duke didn’t respond to inquiries for this story.
Rea said the way such plans treat regulatory risks may have more to do with state requirements than with what the companies themselves think will happen.
Entergy’s subsidiary in Louisiana is planning to drop its 15-year practice of including a carbon price among its planning assumptions, citing a lack of congressional interest and a Trump-signed law repealing green energy incentives.
But the company is warning of potential carbon cost risks from a future president or exposure through European Union export policies, a company document said. Entergy also didn’t return calls for comment.
Are utilities on the hook?
Most states are served by traditional electric utilities whose rates are set by state regulators. When public utility commissions in those states sign off on a utility’s resource plan, that plan in effect becomes a joint venture. The company is assured at least some ability to recover its investment costs from the ratepayers whose interests the PUC represents during the decade or two in which the plan remains in effect.
Sierra Club is devoting more resources to challenging integrated resource plans, said staff attorney Isabella Ariza, because, once they’re approved, challenging the construction of new fossil fuels generation becomes more difficult, she said.
Utilities are rushing to get new gas plants approved, because once they do, “They’re entitled to recover, no questions asked,” she said.
But that doesn’t mean the plants won’t become stranded assets; only that if they do, ratepayers will be on the hook them, she said.
“It’s very dangerous for regulatory agencies, like public service commissions, to approve these gas plans, because once they do, there’s basically nothing anyone can do,” she said.
But other experts cautioned that even with an approved resource plan in hand, utilities and their shareholders might share in the risk if they can’t recoup investments because of a change they should have anticipated. That might include a regulatory change, they said — which is why some utilities might be keen to acknowledge those uncertainties in their resource plans.
“It’s not actually a cut and dry question,” said David Pomerantz, executive director of the think tank Energy and Policy Institute. “If they’ve gotten all of those approvals, they’re more insulated from risk, but it’s not a perfect seal.”
Perhaps in some cases regulatory commissions might require the utility to absorb a share of the investment cost rather than pass it through to the ratepayers, he said. Or they might limit the utilities profits.
“If utilities feel like all the guardrails are off and the only thing we have to worry about is local cost-regulation…I think they’re going to end up regretting that if that’s the posture that they take,” he said.
Independent power producers have fewer protections than regulated utilities. But one person from an independent generating company — granted anonymity to discuss internal views — said there was skepticism that any future administration would risk public anger by introducing rules that are tough enough to make newly-constructed gas plants shut down or run less, because doing so would raise costs for ratepayers.
That will be particularly politically fraught in a future in which power costs might be elevated because of demand from data centers and other factors, the person said.
Holmstead, who now represents utility-sector clients as an attorney at Bracewell LLP, echoed that sentiment.
“In general, industry does not believe that a future EPA will impose [carbon dioxide] regulations that would threaten the reliability or affordability of the power supply,” he said. “Sure, they recognize that there is future regulatory risk, but they believe that economic and political realities will keep a future EPA from going overboard.”
