Bringing Sustainability to Life: How NiSource Moved to Renewable Energy
April 28, 2021
The process of extracting & producing energy from non-renewable sources such as oil & coal pollutes our environment in many ways, the most significant being the emission of greenhouse gases like carbon dioxide & methane. The burning of coal also releases mercury & other pollutants into the air and water. So in addition to depleting non-renewable resources, like fossil fuels, we are warming & polluting our planet, and causing more extreme weather events.
Since the pre-industrial period, human activities are estimated to have increased Earth’s global average temperature by about 1 degree Celsius (1.8 degrees Fahrenheit), a number that is currently increasing by 0.2 degrees Celsius (0.36 degrees Fahrenheit) per decade. Most of the current warming trend is extremely likely (greater than 95 percent probability) the result of human activity since the 1950s and is proceeding at an unprecedented rate.
Figure 1: change in global surface temperature relative to 1951-1980 average temperatures, with the year 2020 tying with 2016 for warmest on record (Source: NASA's Goddard Institute for Space Studies)
Renewable energy sources such as wind, solar, hydro & geo-thermal are really the way to reduce greenhouse gas emissions and fight against the global warming trend, but how do countries, economies, and individual organizations make the monumental shift to renewables?
Amy Antoniolli, Environmental Counsel at Schiff Hardin Law discusses how NiSource energy was able to transition to renewables. Maggie Rice, legal counsel from NiSource discusses how they made the shift to wind and solar, and how they are working towards a goal of a 90% reduction in greenhouse gas emissions by 2030 and to completely retire coal-fired energy generation by 2028.
Schiff Hardin Overview
For over 150 years Schiff Hardin lawyers have served as strong advocates and trusted counselors for clients in virtually every industry. They are a general practice law firm representing clients across the U.S. and around the world. Schiff Harding has a wide range of specialties and services. Their Environmental group is consistently recognized by Chamber US as a premier practice in its annual rankings. And several of their lawyers also have been recognized publications including the Law Bulletin’s Illinois Leading Lawyers Network, Illinois Super Lawyers, U.S. News and World Report’s Best Lawyers in America, and Who’s Who Legal– Environment.
NiSource is one of the largest, fully regulated utilities in the U.S. They are a natural gas & electricity company providing energy to over 4 million customers across 6 states. NiSource has been named to the 2020 Dow Jones Sustainability Index in recognition of the company's sustainable business practices and performance for the seventh consecutive year. NiSource is one of seven U.S. utility companies on the 2020 list.
NiSource is driving towards a 90 percent reduction in greenhouse gas emissions by 2030, and is enhancing the safety and reliability of their systems for their customers and communities. NiSource continues to achieve sustainability milestones, including significant progress in its plan to retire 80% of its remaining coal-fired electric generation by 2023 and all coal generation to be replaced by lower cost, reliable and cleaner options by 2028. In addition to reducing greenhouse gas emissions, this plan is expected to save customers approximately $4 billion dollars over 30 years.
Antoniolli: As Nisource is undergoing this major investment in clean energy and transition to renewables, can you explain how this transition will benefit your customers, communities, and stakeholders?
Rice: I think the environmental benefit is clear. Moving from coal to renewables is going to make for cleaner air for our customers and anyone in the NW indiana area. But the really cool thing about this plan is we are also achieving a really significant cost savings of $4B dollars over the course of 30 years. That really makes this initiative a win-win for everyone involved.
Antoniolli: It’s a remarkable transition that NiSource has made in a short period of time. What has made the process & goals NiSource set a unique story for the company?
Rice: We really started out w/ the concept that affordability was job one. We really wanted to make sure what we chose was affordable to our customers. The Environmental goals were obviously important but we didn’t want to do anything that would make our customers' bills higher.
Antoniolli: NiSource is based in Indiana, and Indiana does not have a renewable portfolio standard. What do you think this says about Ni Source & the Marketplace?
Rice: The free market worked really well. We were seeing our coal units being called out less often meaning they were being providing power less often into the grid. As gas became cheaper and cheaper. We initially looked at gas and do we want to move from coal to gas but ultimately decided renewables were the best option It was not entirely the free market that drove this. We are taking advantage of various tax credits that are available. Specifically tax credits in solar & win.
Antoniolli: What is one key challenge NiSource encountered on the way to achieving these goals?
Rice: the biggest one to overcome was the thought that there is no way that this could be cheaper. That retiring these plants has got to cost more money. Also Indiana is a coal producing state so there are people interested in keeping coal going. But that part was less difficult than we expected. We held stakeholder sessions with groups representing our customers, environmental groups, and state lobbyists.
Antoniolli: Did you set any environmental targets that went beyond Federal & State requirements and why?
Rice: The 90% reduction significantly exceeds what was prodpopsed by the Obama administration and is exceeding what was just recently proposed by the Biden administration. 50 -52% by 2030, we are looking at 90%. In many ways we are looking to push the envelope and develop environmental programs that are cutting edge. ONe of those that doesn’t relate to fuel mix is right now we are really focused on our right of ways...where our power lines and gas lines run and making sure those are sustainable and that they provided habitat for native, endangered species and pollinators. That is an example of an initiative that we dont’ have to do but we think is right to do. We see this as minimal cost. If we are going in and doing work in a right of way area we have got to plant s something. Why not plant something that attracts pollinators. Really a matter of re-looking at our work as opposed to putting a lot of money into these initiatives.
Antoniolli: How ESG plays a role in your practice as assistant general counsel?
Rice: ESG has become a much larger part of what we are doing. I started in 2009 and it was about 5% of what I do. Today it represents about 10-20%. As legal counsel we fly spec everything that is disclosed that comes out of the company. Not just 10Ks & 10Qs but everything that is put on our website. We need to make sure that everything is absolutely accurate and that ther eis a minim of spin on it. We want to give people a very accurate idea of who our company is and what our plans are.
Antoniolli: What have you learned about integrating ESG into your everyday practice
Rice: As an ESG Leader in the company, I find that in my own department I am looked at as someone who is an expert in the ESG arena. I realize I need to lead by example. I am asked on all things from disposable batteries and spray air cans and I need to make sure I have the right response on that stuff. In terms of my own work, I am of that generation where I like paper, and this whole work from home thing is spurring me to become more paperless. It is great for the environment and records management. I am not perfect at it, but I make an effort
Antoniolli: Does NiSource require its service providers to meet ESG benchmarks?
Rice: We do require it for certain suppliers. It is something we are looking at moving into the future. It is a growth area for us. So more to come on that.
Antoniolli: The SEC has been really active since the Biden administration took over in January. They have created a new ESG task force, and announced that ESG risks are going to be a central examination priority. Also, they would like to revisit the 2010 guidance on climate change disclosures. If you had a crystal ball, what is one climate or environmental related action you expect this administration to take.
Rice: I expect some really quick actions from the Biden administration both based on the executive orders, but also based on this new goal that was announced of a 50% reduction in greenhouse gas emissions by 2030. In addition, he is looking to make the energy sector carbon neutral by 2035. So we will see a lot of quick action.
One area where we have already seen some proposals through the American Jobs plan is with electric vehicles. That is something that my company also has a lot of initiatives on. I think we will see a lot more on EVs, incentives to purchase, and a network of charging stations.
Maybe not by the end of this year, but we will see that in order to achieve a 50% reduction, we will see a replacement to the clean power plan/affordable clean energy rule, which is the rule dealing with emissions from the power sector. Not sure it will be this year, but there will be a lot of activity on it and it will be a very interesting development once we see a draft rule.
Excerpts from Dream Source Solutions April 22, 2021 Earth Day Webinar: Bringing Sustainability to Life. Focusing on the “E” in ESG.
Listen to the full interview at: https://www.dream-sourcing.com/webinars