On Tuesday, President Obama gave a speech presenting his Climate Action Plan to the American people, arguing that "climate change is no longer a distant threat" and has "far-reaching consequences and real economic costs."

The U.S. utility industry is no stranger to climate change—from the devastation wrought by extreme weather events such as Superstorm Sandy to the ongoing disruption from new, clean energy sources like wind and solar.

Obama knows "no single step can reverse the effects of climate change" and identifies multiple actions his administration will take to minimize climate change. But how will each of these actions affect utilities? Here are six goals from the plan that utility leaders and executives need to know about:

(Image credit: WhiteHouse.gov)

1. PHASE OUT FOSSIL FUELS

There are no federal standards to reduce carbon emissions yet, and Obama says he is looking for state and local governments to help reduce power plant pollution. The plan suggest that "abundant clean energy solutions" will be phased in to continue supplying "reliable, affordable power." 

The plan states: "President Obama is issuing a Presidential Memorandum directing the Environmental Protection Agency to work expeditiously to complete carbon pollution standards for both new and existing power plants."

The plan also announces new loans for advanced fossil energy projects: "The Department of Energy will issue a Federal Register Notice announcing a draft of a solicitation that would make up to $8 billion in (self-pay) loan guarantee authority available for a wide array of advanced fossil energy projects."

President Obama is seeking to eliminate fossil fuel tax subsidies from his Fiscal Year 2014 budget. 

2. DRIVE FEDERAL LEADERSHIP ON CLEAN ENERGY

Obama's plan says his Administration "will continue to drive American leadership in clean energy technologies, such as efficient natural gas, nuclear, renewables, and clean coal technology." 

The plan will facilitate federal agencies' deployment of renewables by "accelerating clean energy permitting." Furthermore, a new clean energy goal will be set: "The federal government will consume 20 percent of its electricity from renewable sources by 2020—more than double the current goal of 7.5 percent." The Administration will be "conducting a survey of current projects in order to track progress and facilitate the sharing of best practices."

Obama's plan says the White House will be "increasing funding for clean energy technology across all agencies by 30 percent, to approximately $7.9 billion."

3. HARDEN THE GRID AGAINST EXTREME WEATHER EVENTS

In the wake of Hurricane Sandy, Obama's Climate Action Plan seeks to make the electric grid far more resilient to extreme weather events.

The plan says "the President will direct federal agencies to identify and remove barriers to making climate-resilient investments; identify and remove counterproductive policies that increase vulnerabilities; and encourage and support smarter, more resilient investments, including through agency grants, technical assistance, and other programs."

The plan also states the Administration is working to identify the industry's vulnerabilities to climate change: "The Department of Energy will soon release an assessment of climate-change impacts on the energy sector, including power-plant disruptions due to drought and the disruption of fuel supplies during severe storms, as well as potential opportunities to make our energy infrastructure more resilient to these risks."

4. PUSH ENERGY EFFICIENCY

Obama's Climate Action Plan sets a new efficiency goal for the U.S.: energy efficiency standards for appliances and federal buildings will be used to "reduce carbon pollution by at least 3 billion metric tons cumulatively by 2030 – equivalent to nearly one-half of the carbon pollution from the entire U.S. energy sector for one year."

The Climate Action Plan acknowledges that "energy efficiency upgrades bring significant cost savings, but upfront costs act as a barrier to more widespread investment." To counteract this, the plan announces two new initiatives:

• "As soon as this fall, the Department of Agriculture’s Rural Utilities Service will finalize a proposed update to its Energy Efficiency and Conservation Loan Program to provide up to $250 million for rural utilities to finance efficiency investments by businesses and homeowners across rural America."

• "The Department [of Agriculture] is also streamlining its Rural Energy for America program to provide grants and loan guarantees directly to agricultural producers and rural small businesses for energy efficiency and renewable energy systems." 

5. CREATE NEW REVIEW OF ENERGY SECTOR

The Obama Administration says it will set up a new Quadrennial Energy Review "led by the White House Domestic Policy Council and Office of Science and Technology Policy, supported by a Secretariat established at the Department of Energy" to "identify the threats, risks, and opportunities for U.S. energy and climate security, enabling the federal government to translate policy goals into a set of analytically based, clearly articulated, sequenced and integrated actions, and proposed investments over a four-year planning horizon."

6. PROMOTE CLEAN ENERGY ON A GLOBAL SCALE 

Obama's Climate Action plan outlines that the U.S. will push clean energy development and investment internationally:

• On natural gas: "Going forward, we will promote fuel-switching from coal to gas for electricity production and encourage the development of a global market for gas."

• On nuclear energy: "Going forward, we will expand these efforts [sharing 'research and development, nuclear waste and storage, training, regulations, quality control, and comprehensive fuel leasing options'] to promote nuclear energy generation consistent with maximizing safety and nonproliferation goals."

• On clean coal: "Going forward, we will continue [...] bilateral and multilateral efforts" to "advance the development and deployment of clean coal technologies."

• On energy efficiency: "We will work to expand these efforts focusing on several critical areas, including: improving building efficiency, reducing energy consumption at water and wastewater treatment facilities, and expanding global appliance standards."

• On fossil fuels: "The President calls for an end to U.S. government support for public financing of new coal plants overseas, except for (a) the most efficient coal technology available in the world’s poorest countries in cases where no other economically feasible alternative exists, or (b) facilities deploying carbon capture and sequestration technologies. As part of this new commitment, we will work actively to secure the agreement of other countries and the multilateral development banks to adopt similar policies as soon as possible."

Finally, Obama's plan states the U.S. "will work with trading partners to launch negotiations at the World Trade Organization towards global free trade in environmental goods, including clean energy technologies such as solar, wind, hydro and geothermal.

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