Executive Energy Forum (EEF), Post-Election Edition: 3 Key Takeaways

Article by Commodities Management Group

On November 19th, Constellation hosted its complimentary Executive Energy Forum (EEF). Although traditionally hosted in Washington, D.C. during election years, the EEF gathered energy industry and political experts virtually to discuss how results of the 2020 election will shape energy policies and markets in 2021 and beyond.

The Forum included:

• Opening remarks from Andrew Singer, Vice President and General Manager, East Region at Constellation, who reflected on new challenges and questions posed by the COVID-19 pandemic and an election year;
• David Gilbert, Vice President, Federal Government Affairs at Exelon, moderated a panel on what to expect for federal energy policy with Chris Giblin of Ogilvy Government Relations, Lisa Kountoupes of Kountoupes, Denham, Carr & Reid, and Russ Sullivan of Brownstein Hyatt Farber Schrek;
• A post-election discussion between Amy Harder, National Energy and Climate Change Reporter at Axios, and Ronald Brownstein, Senior Political Analyst at CNN;
• A keynote presentation from former Texas Governor and U.S. Secretary of Energy, Rick Perry, about recent and future energy investments to propel America forward; and
• Closing remarks by Chuck Hanna, Vice President, National Accounts and Solutions Sales at Constellation, who recapped the day’s discussions.

In this blog post, we focus on three key takeaways that will help you anticipate future energy policies and inform how your business uses and manages energy to meet its goals.

Gilbert led a discussion about demographics-driven election results and expectations for the clean energy agenda of the incoming administration.

1. Pre-election projections did not anticipate the narrow margins and party performances in a highly demographics-driven election.

It’s clear that demographics drove the 2020 election results. As expected, the largest metropolitan areas voted heavily for President-elect Joe Biden, and more rural areas skewed strongly towards President Donald Trump. However, the final margins were considerably closer than pollsters predicted and, interestingly, metro voters also split their votes across parties down-ticket. For the most part, pre-election polling was inflated for Democratic candidates and deflated for Republican candidates, and Republicans fared considerably better in Senate (potentially maintaining control, pending two Georgia runoffs on January 5^th) and House of Representatives (flipping at least 12 seats) races than projected.

Now, since there will be such narrow margins in the 117^th Congress and a split government, no legislation is expected to pass without bipartisan support. As a result, we can expect to see significant executive action for energy policy and regulation. Kountoupes also thinks that Biden’s clean energy agenda will be ambitious. “He knows that our allies across the world are looking for global leadership with respect to climate change,” she said. The panel anticipates that, instead of a standalone energy package, we may see movement on climate change through investments in R&D and technology. These investments can complement existing discussions about infrastructure, from tax packages to transportation incentives.

Harder and Brownstein revealed the connection between state carbon emissions and voting patterns, as well as the need for bipartisan support of clean energy initiatives.

2. Red and blue politics drive brown and green policy.

As mentioned above, we are experiencing demographic separation of political parties. Brownstein outlined additional geographic division, which in some ways is the most visible measure, especially when it comes to energy. In the current environment, if you ask Americans for the most important issues impacting their votes, many will focus on the pandemic or the economy, rather than climate change. However, energy and climate change can be one of the best predictors for how a state votes.

“One of the best predictors of how a state votes is the amount of carbon it emits per dollar of economic activity,” said Brownstein. The U.S. Energy Information Administration (EIA) measures and tracks the extent to which states are integrated into the fossil fuel economy as both producers and consumers. Nearly all states with the highest carbon emissions per dollar of economic output voted for President Trump and nearly all states with the least carbon emissions per dollar of economic output voted for President-elect Biden. There are nuances around the growth of renewables like wind and solar as economic factors in red states like Florida and Texas but, by and large, “red and blue largely track brown and green energy.”

3. Bipartisan support for clean energy can help mitigate frequent regulatory disruption to businesses and move the needle on climate change.

Each election cycle, there are administrative items that will pass by executive order to undo actions implemented by the prior administration. These legislative and policy changes, largely driven by election results, can be very disruptive to businesses. “Washington has become a swinging pendulum of regulatory action … for businesses this is an immense amount of uncertainty,” explained Harder. She predicts that President-elect Biden will not only move forward with a combination of executive actions but will infuse climate change into everything he does.

“Climate change is a unique problem in that it’s cumulative, so the longer we wait to do something, the harder it gets to solve and the bigger the solutions need to be,” said Harder. We can expect to see clean energy incentives with a focus on renewables and storage, as well as a military and federal agency focus on renewable procurement. Additionally, Harder expects to see a clean energy standard mandating a certain amount of electricity be green by a certain date. The private sector, including utilities, has already embraced carbon-free and other environmental goals. The appetite from businesses for regulatory certainty coupled with the cumulative urgency of climate change reveal the need for more bipartisan support of clean energy in order to move forward.