The Challenge


The demand for electricity is increasing and utilities are in the business of serving customers. Yet, many of the resources we depend upon to provide reliable and low-cost energy are the same ones that release greenhouse gas emissions attributed to global warming.

Approximately 50 percent of America’s electric energy is generated using coal and about 22 percent is generated with natural gas and oil. These resources emit some level of carbon dioxide – a greenhouse gas – and concerns about climate change have created a focused effort to reduce emissions via legislation.

Many types of businesses will be impacted by what is called the American Clean Energy and Security Act.

U.S. Greenhouse Gas Emissions

How this legislation specifically impacts electric utilities remains unknown; however, the costs associated with reducing greenhouse gas emissions, particularly carbon dioxide, at the levels proposed in the legislation, are certain to come at a price that could significantly increase your electric rates over the next 15 years.

Why? It will cost money to install the technologies or replace the resources in order to reach the level of emissions proposed in the legislation. Costs – passed on to consumers - could come in the form of:

  • a carbon tax that emitters must pay for emitting greenhouse gasses above the approved limit,
  • costs associated with purchasing or trading allowances from entities that have non-emitting resources;
  • construction costs related to building new renewable energy resources to meet a renewable portfolio standard;
  • fines charged to entities that exceed their limits if they are able to reduce them; or
  • a combination of all four.

Another part of the challenge:

Currently, there is no commercial scale technology available to capture carbon and sequestrate carbon dioxide emissions. Who will build it? Will the transfer of carbon require the need for pipelines like those used for oil?

In addition, it is expected to take 10-20 years for the technology to become available, and there are concerns regarding what environmental changes a large amount of carbon stored underground will cause.

In short, there is a lot that needs to happen in order to return to emission levels seen 20 years ago. That's the challenge.