The utility industry—specifically power, water, and broadband—is continuing to get reshaped by new government regulations. The latest round of regulations proposes more stringent environmental standards for power plants, power transmission systems, and water distribution systems.
In June of 2024, the U.S. Environmental Protection Agency (EPA) released its 2024-2027 Climate Adaptation Plan. The plan focuses heavily on climate change resiliency, but also air pollution reduction, clean water promotion, and environmental justice.
The new plan modernizes the agency’s financial assistance programs to encourage investments in projects considered more resilient to climate change.
“We are equipping communities and the recipients of our financial resources with the tools, data, information, and technical support they need to assess their climate risks and develop the climate-resilience solutions most appropriate for them,” stated Michael S. Regan, Administrator for the EPA, in a forward to the plan. “We are integrating climate adaptation into our rulemaking processes, including regulations, permits, and National Environmental Policy Act reviews….”
This overarching document embodies the efforts of numerous other environmental regulations, including ones specific to companies operating in the utilities.
Oil and natural gas
The EPA considers methane a “super pollutant” many times more potent than carbon dioxide. So, a rule passed in 2024—the Methane Emissions and Waste Reduction Incentive Program—is designed to prevent an estimated 58 million tons of methane emissions from 2024 to 2038. Oil and natural gas companies must be prepared to phase in the elimination of routine flaring of natural gas produced by new oil wells, monitor for methane leaks, and phase out equipment with high-emitting emissions.
Another EPA regulation—one that targets volatile organic compounds (VOCs)—also affects the oil and natural gas industry, since they tend to be significant sources of this smog-forming substance. Oil and natural gas companies should invest in methane monitoring technology and cut emissions.
Power Plants
In May 2023, EPA updated its Clean Air Act for the first time since 2015. The Clean Air Act sets carbon dioxide (CO2) emission limits for new gas-fired combustion turbines, existing coal, oil, and gas-fired steam generating units, and certain existing gas-fired combustion turbines. The EPA also regulates air pollution through the Acid Rain Program (ARP), the interstate air pollution transport programs, and the Mercury and Air Toxics Standards (MATS).
Another major change affecting power plants is the removal of hydrogen as a "best system of emission reduction" for gas plants to meet the new standards. This leaves only carbon capture and sequestration (CCS) as the “best system” for meeting the new standards. And there isn’t enough successful CCS history, and people who know CCS and supply chains to support using CCS at this large of a scale.
Existing coal plants that expect to be operational beyond 2039 will be required to install CCS beginning in 2032. This rule applies to all plants operational more than 40% of the time, whereas the rule was going to apply to plants operational more than 50% of the time.
Electric power
A Department of Energy (DoE) study shows power outages cost the US economy up to $70 billion annually. The $65 billion investment into electric power includes the single largest investment in clean energy transmission, such as solar and wind. However, as the industry receives more money for new projects, expect increased labor shortages and supply disruptions.
The DoE began investing almost $171 billion in 2023 for the largest electric and gas utilities to modernize and decarbonize the grid. Expect that to continue. The DoE is currently upgrading 100,000 miles of transmission lines and it finalized a rule designed to make federal permitting of new transmission lines more efficient.
One of the drivers of electric power is the greater presence of electric vehicles (EVs). The EPA, which sets out greenhouse gas standards for passenger vehicles and light trucks will soon be announcing regulations for model years 2027 and beyond. And a new bill invests $7.5 billion to build out the first-ever national network of EV chargers. So, there are fewer obstacles to operating EVs. Consider electrifying your fleet.
Water and wastewater
The water and wastewater markets are still feeling the effects of the Infrastructure Investment and Jobs Act (IIJA) passed in 2021. The act allocates a $55-billion USD investment in clean drinking water and wastewater infrastructure.
The act will lead to the replacement of all of the nation’s lead pipes and service lines, and the chemical PFAS (per- and polyfluoroalkyl). If any company has lead pipes or uses PFAS, now would be the time to transition to more acceptable choices.
Telecommunications
The IIJA is the first major national investment in broadband. So, companies that provide the service are continuing to see government funding to bring broadband to companies that don’t have it and to modernize older, existing broadband connections.
Also, the large government investment into broadband, water, and other sectors has increased the amount of work needed to be accomplished. However, the number of people available to complete the work remains the same. So, finding talent in the desired timeframe will continue to be a challenge in 2025.
Manufacturers
Manufacturers produce a lot of HFCs, which have been regulated by the American Innovation and Manufacturing (AIM) Act of 2020.
On November 3, 2022, the EPA issued a proposed rule to establish the methodology for allocating HFC production and consumption allowances starting with calendar year 2024 allowances. The agency will cap HFC production and consumption allowances from 2024 to 2028 to 40% below the baseline. This builds on the agency’s AIM Act, which aims to decrease HFCs by 85% over the next 15 years.
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