Utilities are backtracking on their climate commitments and giving more gas to fossil fuels, according to Sierra Club’s annual report that evaluates utilities on their transition to clean energy.
“Utilities are greenwashing,” the report said. Of the 75 companies Sierra Club analyzed, 65 utilities have some form of climate pledge, target or aspirational goal. The Sierra Club said utilities often highlight these commitments as proof of their dedication to clean energy and environmental responsibility.
Image: The Sierra Club
However, according to the Sierra Club, the data tells a different story.
Sierra Club evaluated utilities based on whether they will phase out coal plants by 2030, stop building new gas plants, and invest in enough clean energy to replace fossil fuels by 2035. Sierra Club graded the utilities by calculating their plans to retire coal by 2030, not building any new gas through 2035, and building an amount of new clean energy proportional with its existing fossil fuel generation and projected load growth by 2035. The scores were calculated using the equation:
“We do this report every single year starting in 2021, and this is the lowest score that we’ve ever seen,” said Noah Ver Beek, a senior energy campaigns analyst for Sierra Club and one of the report’s authors.
On all fronts, most companies failed.
Utilities collectively proposed 118 GW of new gas capacity, a 27% increase from the previous year.
Image: The Sierra Club
Georgia Power is planning to add the most new gas capacity, with 9.67 GW planned by 2035. Tennessee Valley Authority and Duke Energy Carolinas were a close second, with 9.37 GW and 8.8 GW, respectively.
Louisville Gas & Electric and Kentucky Utilities had the most remaining coal without a 2030 retirement commitment, with 22,800 GWh of coal it does not plan to retire by 2030. Duke Energy Carolinas was a close second, with 22,400 GWh.
The good news is utilities made some progress in planning new clean energy, with plans to build 578 MWh of clean energy through 2035. Sierra Club said this is a significant increase from the previous year’s 371 MWh.
But the bad news: this increase in clean energy is disproportionate to the increase in load growth.
“They’re using load growth as an opportunity to do the wrong thing instead of meeting the moment with the immense potential of wind, solar and battery storage,” said Emma Pabst, a campaign manager for Sierra Club and coauthor of the report during a webinar following the report.
Image: The Sierra Club
Coal is one of the most polluting and often the most expensive method to generate electricity. According to the Sierra Club, coal power was 28% more expensive in 2024 than it was in 2021.
Even so, the Sierra Club said utilities were only committed to retiring 29% of their coal generation by 2030.
While some utilities argue they need new gas to serve growing demand, Sierra Club said there are three main issues with this claim. Utilities can serve new load without such a drastic expansion of new gas by using clean solutions such as energy efficiency, increased transmission, demand-side management, renewables and storage, the Sierra Club said.
Evergy, which “has a bad habit of moving the goal posts,” according to Sierra Club, said it had the potential to reduce greenhouse gas emissions 85% by 2030 from a 2005 baseline. However, Sierra Club said Evergy only plans to build enough clean energy to replace 38% of its coal and gas generation, and projected load growth by 2035. Instead of clean energy, Evergy has switched to converting many of its coal units to burn gas, or in some cases to burn gas in addition to coal.
While Evergy blamed its expectations for higher customer load growth, Sierra Club said it could meet that load growth with clean energy. Instead of doing so, Evergy proposed less new clean energy in its 2025 plan than it did in 2024.
Second, even if utilities relied solely on new gas to serve all load growth, many are planning to overbuild it. According to Sierra Club, over a third of the utilities in the report are planning more new gas than needed to meet their entire projected load growth through 2035. Meaning, these utilities are planning to add so much gas that they would still have more energy than needed without adding new sources of clean energy or coal, for that matter.
Take Appalachian Power, for example, which plans to build enough gas to generate over 30 times its projected load growth.
In contrast, if we assume all planned clean energy would replace existing coal and gas generation first, the Sierra Club said the planned clean energy is barely sufficient to replace half, let alone supply forecasted load growth.
“Utilities must respond to short-term load growth with fast, flexible solutions,” the Sierra Club said.
New gas plants, however, face long lead times due to supply chain bottlenecks, the Sierra Club said, particularly in procuring gas turbines, which can drive up costs and delay projects. These delays increase the risk of reliability shortfalls if utilities can’t bring planned gas plants online in time.
Image: The Sierra Club
Despite the economic and reliability risks, Sierra Club said 61 of the 75 operating utility companies it assessed are still moving forward with plans to build 118 GW of new gas capacity by 2035.
“America is the land of opportunity and innovation and we need to break down a lot of these barriers to bring the cleaner, cheaper resources onto the grid,” Congresswoman Kathy Castor (D) said. “Federal policy right now is making that more difficult, but there is so much that can be done at the state level, and public servants need to push the utilities to do better and help people save on their electric bills.”
“It’s not fair, it’s not right, and we can do so much better,” Castor said.
The report added two recommendations to the six recommendations it gave utilities last year: 1) to ramp up their clean build as quickly as possible; and 2) to work with data centers and other large customers to encourage flexible operations to avoid overbuild and to locate in places that already have or are building out plentiful clean energy.
“Wind, solar and all of these distributed resources should be the default option for cheap, clean and reliable power,” Ver Beek said. “There’s still a path for utilities to invest in the resources that we know people want – for utility commissions to pressure utilities to do this and for states to make this path smoother and faster to get all of those resources that are ready and waiting to come online as soon as we can.”
While climate may be “the existential overarching threat,” Vote Solar’s executive director Sachu Constantine said it’s “kitchen table economics” that will move people to pressure utilities and commissions.
“That’s going to also help the large-scale resources justify themselves and interconnect more flexibly,” Constantine said. It’s an ecosystem that is self-reinforcing and people are at the heart of it, and I think that’s just really important to remember.”
“Sometimes it feels hopeless when you have an administration like this, when you have the kind of powerlessness that we often feel in the face of utility investments,” Constantine said. “But solar and renewables and flexible load and electric vehicles and storage all are opportunities for people to take back power.”
Watch a webinar from the report below.
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