Uncertainty seems ever present this year in the energy industry.
With details on tariffs shifting daily, a vague future for energy tax credits that will be determined later this year in a broad budget package, and an assault on greenhouse gas emission regulations that in the past have aided the fight against climate change, a cloud of uncertainty has parked itself overhead.
Do I fret? From an organizational standpoint, not so much. Clean Power Alliance is used to, and prepared for, uncertainty. Managing swings in commodity prices, changes in weather patterns, shifts in consumer habits, and modifications to policies and regulations were all part of our daily lives even before uncertainty came to be a dominant theme in popular parlance. We’ve heavily invested in people and systems that, together, provide the experience and expertise necessary to manage uncertainty.
To this preparation, we add our mission to pursue decarbonization of the electricity sector with competitive rates. This anchoring purpose allows us to ensure that uncertainty doesn’t lead to inaction.
However, this most recent bout of uncertainty will certainly require tapping reserves of creativity and mental fortitude to respond.
We’ll have to devise new ways to solicit and contract for clean energy projects that have delivery dates stretching years into the future and, despite progress made in domestic manufacturing, remain tethered to disrupted global supply chains for raw materials and component parts.
We’ll have to resolve for new tradeoffs in our long-term purchasing strategy in a time when project costs may rise – or not – due to federal tax credit policy. Since 2019, we’ve intentionally focused on pursuing an above-compliance energy and reliability purchasing strategy. By front-loading thousands of megawatts of renewable energy and battery energy storage purchases in the lower-price environment of the first half of this decade, we now have more flexibility to allow the market to evolve and stabilize.
We’ll have to be more insightful about consumer willingness and preferences in the face of possible cuts to incentives for electric vehicles and building electrification equipment, continually testing our current predictions of electricity load growth in Southern California.
We’ll have to be keenly aware of any emerging cracks in California’s state policy consensus around electricity decarbonization. A changing regulatory environment could provide those with less ambitious decarbonization efforts an opportunity to gain a competitive advantage, while also leading to more climate altering greenhouse gas emissions.
Which leads to a broader uncertainty – the impact of climate change. While CPA can expand the range of possible weather extremes that we analyze to manage risk, if others in the state, region, nation, and world don’t join us in maintaining commitments to decarbonization efforts, then the rate of global temperature increase will continue to grow, as will its worsening impacts.
Thankfully CPA communities and our customers – by growing participation in our programs and choosing high levels of renewable energy – continue to do their part, inspiring us to make progress even as the challenges become more complex.
