Press Release

SEPA Report: Utility Transformation to Carbon-Free Electricity

WASHINGTON, D.C. (Feb. 7, 2023) — The Smart Electric Power Alliance (SEPA) today released the 2023 Utility Transformation Profile, providing unique insights and recommendations that all utilities can utilize to accelerate their transition to carbon-free energy. SEPA is a non-profit member organization of over 1,100 utilities, corporations, and government entities singularly focused on, accelerating the transformation to a carbon-free electric system.

Over the past year, SEPA collected survey responses from more than 100 individual utility members, spanning 41 states nationwide, and representing over 50% of U.S. customer accounts. The 2023 Profile is the result of that collaborative effort.

What did we learn?

  • There is no silver bullet. For each utility, the path to a carbon-free energy system will take a different form and require different strategies.
  • Leading utilities improved the strength, depth, and transparency of their carbon-reduction targets by including both direct and indirect scope emissions (e.g., Scope 1, 2, and 3), accelerating target dates, incorporating interim targets, and developing action plans.
  • As customer-sited distributed energy resources (DERs) proliferate, utility respondents are increasing their visibility into distribution system operations to help manage DERs and maintain grid reliability.
  • The journey to an equitable, carbon-free energy system calls for utilities to promote equity through customer programs and planning processes as the transition unfolds.

“Electric utilities, their regulators, customers, and stakeholders all have important roles to play in decarbonizing the U.S. electric power system,” shared Sheri Givens, SEPA president and CEO. “SEPA offers the Utility Transformation Profile to identify areas of both progress and opportunity, and to help our members and the industry at large prioritize the focus areas to accelerate the transition to a carbon-free energy system.”

The Profile highlights industry-wide findings and recommendations, as well as detailed best practices from the leading utilities unveiled on the 2023 Utility Transformation Leaderboard. These twelve utilities have demonstrated the greatest progress and leadership across four dimensions:

  • Clean Energy Resources: The procurement and deployment of carbon-free energy and the utilization of other carbon-reducing capabilities, including demand flexibility and energy efficiency.
  • Corporate Leadership: Utilities are using their unique operational knowledge, expertise and influence to navigate change management and pursue strategic solutions to reach a carbon-free grid.
  • Modern Grid Enablement: The integration of clean energy resources in ways that balance principles of grid flexibility, reliability, resilience, efficiency and affordability.
  • Aligned Actions and Engagement: The path to a clean and modern grid runs through and beyond utility operations. Through Aligned Actions (e.g., innovative customer programs) and Engagement (e.g., comprehensive partnerships and stakeholder processes), utilities can empower their customers and other stakeholders to fulfill their roles in the transformation.

Progress across all of these dimensions is needed, as the modern carbon-free electricity system will require changes to almost every aspect of a utility’s operations, including its energy mix, transmission and distribution systems, planning processes, customer programs, technology, culture and workforce.

2023 Utility Transformation Leaderboard Utilities (in alphabetical order)

  • Austin Energy
  • Green Mountain Power
  • National Grid
  • Pacific Gas and Electric
  • Palo Alto Utilities
  • Portland General Electric
  • Public Service Enterprise Group
  • Seattle City Light
  • Sacramento Municipal Utility District
  • Snohomish County Public Utility District
  • Southern California Edison
  • Xcel Energy

“We applaud the leaderboard utilities for their progress, as well as for helping pave the path for those just beginning the journey,” added Givens. “The results of this work, as well as the other collaborative projects currently underway at SEPA, will equip us and our industry to further accelerate the clean energy transformation.” 

Based on the results, SEPA offers recommendations for U.S. electric utilities as they pursue their own path of transformation:

  • Expand carbon-reduction commitments to include both direct (Scope 1) and indirect emissions (Scopes 2 and 3), as defined by the Greenhouse Gas Protocol Corporate Standard.
  • Establish quantifiable interim carbon-reduction targets, issue a transparent, publicly available plan to achieve interim and ultimate targets, and work with third-party organizations (e.g., Science Based Targets initiative) to verify that targets align with climate science.
  • Establish transparent, standardized emissions tracking and submit for external verification annually in order to ensure transparency and maintain accountability.
  • Integrate equity considerations and goals into system planning, investment analysis, program development, and customer engagement efforts.
  • Expand customer programs to help mitigate rate impacts, provide grid benefits and resilience, and engage all customers in carbon-reduction efforts.
  • Create internal governance structures to manage climate change risks and improve climate resilience.

“Utilities are making real progress towards a carbon-free electricity system. At the same time, we identified opportunities needing increased efforts, like embedding equity in planning processes ,” said Lakin Garth, SEPA project manager and director of research and industry strategy. “Transforming our sophisticated and economically vital electricity system to a modern, carbon-free future is a momentous challenge, and requires SEPA, our members and the industry to collaborate and share solutions to the toughest problems.”

In 2022, SEPA fielded a revised and expanded survey to electric utilities of all types, sizes and geographic areas. This report represents the latest update in the Utility Transformation Challenge, launched in 2019 to provide a comprehensive assessment of utility carbon reduction.

The 2023 Utility Transformation Profile report and Utility Transformation Leaderboard are available here. View frequently asked questions here.