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The new political landscape and shifts in energy policy likely to begin when Donald Trump officially takes over the presidency appear "slightly positive" for U.S. electric utilities, a senior analyst with S&P Global Ratings said.
The biggest plus for utilities under the Trump administration will be the elimination of aggressive deadlines for carbon emissions reductions from the generation fleet that are prescribed under the U.S. EPA's Clean Power Plan, Todd Shipman, U.S. utility sector lead for S&P Global Ratings, said in an interview.
Shipman said that in regard to the CPP, utilities are "not so much fighting being less carbon-intensive going forward," but they are concerned about having enough time and flexibility to meet the carbon rule's targets. The CPP, whose implementation was stayed by the Supreme Court while the D.C. Circuit Court of Appeals deliberates the legality of the rule, seeks to cut carbon emissions from existing power plants by 32% from 2005 levels by 2030, with interim CO2 reduction goals to be met by 2022.
Utilities want to ensure that "there wasn't anything that would disrupt their operations, hurt reliability or force them to have to spend a whole lot of money sooner rather than being able to stretch it out and blend all of those costs into rates over time," Shipman said.
The general concept of reducing emissions is not the issue,...