Governors' Biofuels Coalition

“What steps will your energy policy take to meet our energy needs, while at the same time remaining environmentally friendly and minimizing job loss for fossil power plant workers?”

Like it or not, the next president will need an answer to this question, posed by audience member Ken Bone in the second presidential debate, in the early days of his or her administration.

The electricity sector that powers our country is undergoing its most significant transition since mass electrification. Last year, for the first time ever, the United States generated as much electricity from natural gas as from coal, thanks to the shale gas boom and historically low natural gas prices.

Renewable energy, meanwhile, was the largest source of new capacity and now meets 7 percent of our electricity demand. This dramatic growth of natural gas and renewable power is edging out coal and, in some instances, nuclear power.

Decisions by the next president will shape how the electricity sector responds to these and other changes that carry with them wide-ranging economic and environmental consequences.

Yet energy policy has barely registered as an issue this election cycle despite dramatic differences in the candidates’ platforms.

That’s a shame, because a combination of market forces, statutory deadlines, pending lawsuits and open agency rule-makings will force the nation’s 45th president to tackle a wide range of energy issues. These decisions could shape the electricity sector for decades to come.

For example, the incoming administration will likely face immediate decisions on the Clean Power Plan, the Environmental Protection Agency’s controversial rule limiting carbon dioxide emissions from the power sector. Last month, 10 judges on the D.C. Circuit Court of Appeals heard oral arguments on the rule. With a decision anticipated by early 2017, the next president must choose from one or more possible courses of action, including whether to implement, amend or withdraw the rule, or to appeal the decision to the Supreme Court.

If it reaches the Supreme Court, this case could play a starring role in nomination hearings for a ninth justice (Justice Antonin Scalia passed away in February 2016 after voting to stay the Clean Power Plan’s implementation). The fate of the Clean Power Plan, in turn, may impact our international commitments to reduce greenhouse gas emissions, including the new global Paris agreement, set to take effect next month.

Decisions by the next administration could also change the balance between federal and state power in the electricity sector. So far, states have used their authority over retail electricity markets to influence the fuel mix on the grid and spur technology innovation. That includes requiring utilities to procure renewable energy and meet energy efficiency targets, setting rates for rooftop solar, pricing carbon and initiating pilot projects to test new technologies.

States have also considered subsidizing at-risk coal or nuclear plants. Many of these policies are being challenged in the courts and by the Federal Energy Regulatory Commission (FERC), which has expanded its responsibilities to encompass growth of interstate electricity markets that now serve two-thirds of U.S. electricity demand.

Three Supreme Court decisions in the past two years have sought to clarify the boundaries between state and federal action over energy regulation, but tensions between state and federal policies remain. Any resolution of these tensions — likely to emerge through FERC decisions and future court cases — will impact the degree to which states can spur innovation and determine the future of the grid.

These are just a snapshot of the energy policy issues the next president will face in office. In an election focused on the economy, the trajectory of the electricity sector that underpins it deserves a robust debate.

Where are the conversations about natural gas production and consumption, nuclear energy, economic development in coal communities, energy innovation, energy infrastructure development, and energy efficiency incentives and mandates? Voters need a better understanding of the candidates’ plans for tackling the inevitable — and consequential — challenges that are certain to arise.

Jonas Monast is the C. Boyden Gray Distinguished Fellow, assistant professor and co-director of the Center on Climate, Energy, Environment & Economics at the University of North Carolina School of Law. Sarah Adair is a senior policy associate in the Climate and Energy Program at Duke University’s Nicholas Institute for Environmental Policy Solutions. Kate Konschnik is the founding director of the Harvard Law School’s Environmental Policy Initiative.

 

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