PwC on Sustainability

Our monthly newsletter on sustainability trends and insights impacting your business

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June 2014

What does the EPA's Clean Power Plan proposal mean for your business?

Earlier this month, the Environmental Protection Agency proposed new regulations that would require a 30% reduction in CO2 emissions by 2030. There has been much speculation around what this means for the future of the energy sector, and on the direction of US climate change policy, but what are the potential impacts to businesses? How should energy users prepare for the potential implementation of the regulations during the 2-3 years while the rules are finalized and the specific plans are set?

Companies that use significant amounts of energy – including those with extensive manufacturing operations, data centers, distribution centers, or large amounts of commercial real estate, for example – will need to understand their operational exposure to carbon intensive electricity and should prepare for adjusting their energy mix. While the new rules could mean increased energy costs as the regulations take effect (the EPA predicts an initial average energy cost increase of 5.9%), businesses can also expect more and better energy efficiency and alternative energy options which will be fostered by the plan. However, with more choices comes greater complexity.

What should you start thinking about now?

  • Refine your understanding of your energy use profile and your evolving options. Consider how new technologies may help you cut costs and potentially improve resiliency by shifting to low carbon energy sources.
  • Take a more aggressive approach to energy efficiency now; doing so will make your company less energy dependent and give you greater flexibility with energy choices for the future.

Thinking through what these changes could mean to your business model will help your company become more resilient and better poised to seize additional opportunities down the road.


 

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