Dive Brief:

• Consumers Energy plans to achieve net zero carbon emissions by 2040 for the energy it generates or purchases, the company said Monday.
• Consumers will consider strategies such as carbon capture and sequestration or large-scale tree planting to offset its emissions. The goal is intended to spur innovation, as "the approach we take might be one that we haven't thought of today," Consumers' spokesperson Brian Wheeler told Utility Dive.
• The Michigan-based utility had committed to reduce 90% of its carbon emissions by 2040 in its 2019 Clean Energy Plan, which state regulators approved. The next version of its long-term plan, to be filed in 2021, will include more analysis on the options and costs of the carbon offsets.

Dive Insight:

Consumers' 2019 plan already outlined the phase-out of coal and efforts to reduce the methane footprint of its gas utility operations, as noted in the annual statement of its parent company, CMS Energy. Meanwhile, energy efficiency and renewable energy will take a larger role in its footprint.

The utility is the "the first to set an accelerated 2040 timeline and to lead with clean energy" rather than replacing coal generation with natural gas, according to Samantha Williams, the Midwest climate and clean energy director at the Natural Resources Defense Council (NRDC).

The American Council for an Energy-Efficient Economy said Consumers had shown one of the largest improvements in energy efficiency between 2015 and 2018, among 52 utilities evaluated in its scorecard released earlier this month.

Already, Consumers' has been recognized for its leadership in reducing energy use and waste, named by the American Council for an Energy-Efficient Economy as one of the largest improvements in energy efficiency in its scorecard, released in February.

In 2040, Consumers plans to have two natural gas power plants operating, and the utility could look into retrofitting one or both of the plants with on-site carbon capture, Wheeler said, adding that costs haven't been identified yet.

"We don't have all the answers yet, but our Clean Energy Plan is a great start. We have the know-how and the time to continue innovating and creating to solve this problem," Consumers' President and CEO Patti Poppe said in a statement.

Environmental groups had previously petitioned Consumers to retire its remaining gas plants ahead of 2040. But while environmentalists would prefer that Consumers gets rid of all fossil fuel generation, the net-zero plan stands out from other utility announcements because other peers have promised carbon offsets while planning the development of new gas generation, NRDC's Williams said.

"Net-zero commitments have become a trend in the electric power industry, and it's important we examine just how serious those commitments are. given the urgency of the climate crisis ... It's significant [Consumers is] doing all of this without digging the hole deeper with new gas plants," she said.

"The climate crisis requires moving away from gas-fired power and toward clean energy as quickly as possible. While we need to see more details on how Consumers will meet that need in the long-term, the near-term plan suggests they're heading down the right path."

Michigan's Attorney General Dana Nessel has been vocal about emissions reductions commitments and her office commended the utility for its effort.

"[T]he Attorney General's office looks forward to working with Consumers Energy in the coming years to achieve that goal while also ensuring the proper protections are in place for Michigan ratepayers," Ryan Jarvi, spokesperson for the Michigan AG, said in an email to Utility Dive.

"Our general commitment we make is we strive to limit increases in our costs," Wheeler said.