Why EEI is trying to kill Biden’s climate rule

By Benjamin Storrow, Jean Chemnick | 05/23/2024 06:37 AM EDT

The powerful utility group cast aside its tradition of remaining neutral on climate change. Here’s why.

Dan Brouillette gestures in front of an LNG terminal.

Dan Brouillette, the former Energy secretary under former President Donald Trump, is the leader of the Edison Electric Institute. Armando Franca/AP

This story was updated at 10:05 a.m. EDT.

The Edison Electric Institute sued the Biden administration Wednesday over EPA’s decision to base its new climate change rule on carbon capture and storage.

The move puts utilities in a potentially awkward position by disputing one of President Joe Biden’s chief climate initiatives at a time when many power companies have committed to eliminating their greenhouse emissions by midcentury. It also means EEI, an influential trade group for large electricity generators, is arguing that carbon capture and sequestration technologies are not ready for deployment, even as some companies look to benefit from federal tax credits for adopting those systems.


The move represents a shift for a powerful industry group with a diverse membership of investor-owned utilities that seldom litigates over environmental rules. Indeed, even as EEI moved to challenge the rule, at least one of its members said Wednesday that it might defend it.

Two years ago, when states and the coal industry challenged the Obama-era Clean Power Plan, in a case that went all the way to the Supreme Court, EEI filed an amicus brief in defense of EPA’s regulatory authorities.

EEI President and CEO Dan Brouillette said in a statement Wednesday that the group’s position hasn’t changed. But he said EPA had failed to make the case that carbon capture and storage — or CCS — meets the statutory threshold of being “adequately demonstrated for broad deployment across our industry.”

“CCS is an emerging technology, and EPA’s implementation timelines do not align with the current reality,” said Brouillette.

EPA’s rule, which was unveiled last month, requires some new gas plants and coal-fired units to begin capturing emissions for permanent storage by 2032, or retire by 2039.

Brouillette called the lawsuit “necessary to protect customers from regulations that rely on not-yet-demonstrated technology and unrealistic compliance timelines,” which he said would undermine reliable power supply.

Brouillette headed the Energy Department under former President Donald Trump, who famously dismissed climate change as a “hoax.” Brouillette’s appointment last year to lead the trade group prompted some environmentalists to predict that EEI would abandon its recent efforts to be seen as a climate leader.

Fifty utilities that are members of EEI have set greenhouse gas reduction goals, with 41 of them committing to net-zero emissions by 2050 or sooner. In February, Brouillette called the Inflation Reduction Act and bipartisan infrastructure law “important programs” for the industry. And EEI’s board of directors is led by three blue-state utility CEOs who have made climate change a main talking point.

EEI Chair Pedro Pizarro, the CEO of California-based Edison International, attended global climate talks in Dubai last year, saying “real actions are needed now” to address rising temperatures. Vice chairs Maria Pope of Portland General Electric and Calvin Butler of Exelon Corp. have also spoken about the urgency that they say is needed to address climate change.

Edison International did not respond to a request for comment.

An Exelon spokesperson said the rule would not impact the Illinois-based utility’s operations. The company spun off its power plants in 2022 to focus on its transmission and distribution business.

James Gherardi, the Exelon spokesperson, did not address the EEI petition in a statement. But he said the utility is committed to working with federal regulators to support the transition to clean energy sources “while ensuring reliability with proven technologies.”

Some environmentalists expressed disappointment that utilities with ambitious climate goals did not step up to voice concerns with EEI’s petition. Exelon, for instance, was a vocal backer of the Clean Power Plan and had long advocated for stronger greenhouse gas regulations within EEI and in public, said Howard Learner, CEO and president of the Chicago-based Environmental Law and Policy Center.

“Leaders step up and lead,” he said. “Exelon is one of largest utilities in the country and should be arguing strongly within EEI to promote sensible climate solutions, and the administration’s actions are certainly sensible climate change regulations.”

Not all EEI members are planning to go along with the lawsuit. Pacific Gas and Electric, the California-based utility, said it is “exploring intervening with other power companies in defense of the EPA rule.”

“While this current EPA rule does not affect us directly, PG&E is supportive of state and federal efforts to address climate change, including through regulation of greenhouse gas emissions,” Melissa Subbotin, a spokesperson for the utility, said in a statement.

EEI’s decision to challenge the regulation is particularly notable because the trade group made a concerted effort to remain neutral over the Clean Power Plan, even as former President Barack Obama’s attempt to cut planet-warming emissions from power plants divided the industry.

Former DTE Energy CEO Gerard Anderson told E&E News in a 2018 interview that as EEI chair he held many “evening phone calls and weekend meetings” in an attempt to find consensus among the group’s members over the Clean Power Plan.

“That one was controversial with different companies in different positions, different states with different viewpoints and politics,” Anderson said at the time. “But we did as an industry come to a position, and the position the EPA came out with was largely consistent with what the companies had agreed that they could support.”

Anderson retired in 2022. A DTE spokesperson declined to comment on EEI’s lawsuit.

Yet a different kind of consensus is forming over EPA’s current rule. Alex Bond, EEI executive director of clean energy and environment, bristled at suggestions that the group’s shift reflected a political change under Brouillette.

Instead, it mirrors the industry’s view that CCS is not ready for widespread use, despite some members’ attempts to advance the technology, Bond said.

They pointed to comments EEI filed with EPA last summer, before Brouillette took charge. The group wrote that the agency’s decision to make CCS the standard for new emission reductions was “not legally or technically sound” given that it is “not deployable, available, or affordable across the entirety of the industry.”

Some industry officials have expressed concern about the ability to keep up with rising power demand, especially when it takes years for utilities to build new power plants.

Tom Lorenzen, a partner with Crowell & Moring LLP who represents EEI on the suit, said in a recent interview with E&E News that CCS also necessitates the construction of a network of carbon dioxide pipelines.

“Even if it were available, it would take years to build out the pipelines, and there’s no guarantee it could be done by 2032 even today,” he said.

Jeff Holmstead, a former EPA air chief and a partner at Bracewell LLP, called EEI’s challenge “a big deal.”

The trade group hasn’t attached its name to a legal challenge over pollution rules for years. And Holmstead said that was because the group — which operates on concensus — has some members who see an advantage in supporting a standard that they believe they can meet more easily than their competitors.

“I think there certainly are members of the EEI who are not accustomed to challenging EPA rules,” said Holmstead.

That’s not the case this time, he said, because utilities that own coal plants or plan to build new gas facilities would have to make large investments to capture most of their emissions. That describes most utilities.

“The virtual unanimity reflects the fact that people just think EPA has gone too far this time,” he said.

EPA’s rule incorporated numerous elements from EEI’s comments, including the agency’s decision to scrap its plans to regulate existing gas-fired power plants under the rule. But those concessions failed to satisfy the trade group.

“It speaks to what dead-enders they are,” Craig Segall, vice president of Evergreen Action, a climate advocacy group, said of EEI.

“They got a lot of what they wanted in the rule. They also have billions of dollars in public funds and ratepayer funds,” he added. “And so to then try to blow up, literally, the only plausible major climate rule on their industry just speaks to how beholden that group is to fossil fuel interests and to ideological interests.”

Correction: An earlier version of this story incorrectly attributed comments to Portland General Electric. Pacific Gas and Electric, a California-based utility, is exploring a legal defense of EPA’s greenhouse gas rule.

This story also appears in Energywire.