Electric utilities are one of the most heavily regulated industries in the country, second only to the adjacent coal and petroleum business according to one widely cited report. For years, utilities have pointed to this regulation as keeping their hands tied when it comes to decreasing greenhouse gas (GHG) emissions and scaling up renewable energy investments. But recently, more and more utilities have found a way to begin doing business differently.
Two such utilities, AVANGRID and IDACORP, illustrate two very different approaches to the shared goal of bringing down GHG emissions to combat climate change. AVANGRID, which itself operates eight electric and gas utility companies in New York and New England, has divested its fossil fuel investments entirely, and spun off a separate renewables business to handle all the company’s owned power generation. The result, according to our analysis, has made it the “cleanest” utility in the country based on the emissions intensity of its power generation (excluding one other that relies heavily on nuclear power). Avangrid has accomplished this largely by operating the third-largest wind generation fleet in the US, with $1.4B invested in 2019 alone to develop its renewable assets.
By contrast, IDACORP, which operates Idaho Power and serves customers in areas of Idaho and Oregon, has had a head start on clean generation thanks to its 17 hydropower generation facilities along the Snake River and its tributaries. As a result, hydropower accounts for nearly 45% of the company’s energy mix. The second-largest contributor to that mix has become its long-term purchases, third-party power contracts with wind, solar, hydropower, geothermal and biomass generators. Third is coal, which is down to 16% of the company’s mix, having fallen for the sixth consecutive year thanks in part to its recent closing and exiting of coal plants. All told, IDACORP’s generation puts it over the 70th percentile in terms of carbon intensity among the major US utilities we researched.
But the story doesn’t end there for either company. AVANGRID and IDACORP are among just 4 of the 25 utilities we researched that have already established absolute emissions goals: AVANGRID’s for carbon neutrality by 2035, and IDACORP’s for 100% clean energy by 2045. Among AVANGRID’s plans to back up its goal are the largest offshore wind farms in the country, slated to break ground in the next 1-2 years. For its part, IDACORP has definite plans to exit all but one of its remaining coal operations by 2025, and says it “could end all participation in coal plants as early as 2030.” The company is part of an effort by utilities in Western states to more easily share power, which it says that, along with advances in battery storage, will ultimately allow it to take full advantage of regional renewable energy generation, such as solar power from Arizona or wind power from Wyoming.
Of course, both utilities have areas for improvement. Aside from its impressive renewable generation, the purchased energy that AVANGRID delivers to customers features a more traditional power mix. Ideally, the company could deliver on its promise of renewables to its existing electricity customers in New York and New England. And we’d like to see IDACORP firm up its plans to completely exit coal generation as soon as possible. Still, based on the current state of US utilities, we believe both companies are well out in front on the path to a clean energy future.
