(Bloomberg) -- Big US utilities’ climate goals are in peril as artificial intelligence turbocharges electricity demand and Donald Trump’s reelection signals policy shifts that would favor fossil fuels.

These companies all have ambitious targets to cut their carbon emissions, most often to reach “net-zero” by 2050. But the surprising growth in power consumption led by data centers, combined with Republican electoral victories, has some utilities delaying the retirement of coal-burning plants and planning a massive buildout of natural gas generation.

The AI revolution, along with increased demand from new factories and the electrification of everything from vehicles to home heating, has forced power companies to tear up their projections for consumption. Meanwhile, president-elect Trump has repeatedly vowed to “terminate” a suite of federal rules that stifle power-plant pollution and encourage the closure of units generating electricity from coal. 

Electric companies are rushing to meet power demand that's suddenly surging after more than a decade of sluggishness. While utilities continue to add renewable power to their systems, some are are reluctant to shutter dirty plants that still can provide reliable electricity.

“Trump will definitely slow down climate progress,” said Andy DeVries, an analyst for CreditSights Inc. The power demand from data centers, however, will have an even bigger impact, he said. “It just comes out to math. If these data center demand figures are anywhere near realistic, you don’t have the ability to retire coal plants.”

Republican control of the White House and Congress will shift US energy policy away from decarbonization goals, according to a report this month from energy consultancy Wood Mackenzie. So far, the utilities that have indicated plans to delay or reconsider climate goals operate primarily in Republican-led states and swing states. President Joe Biden’s already lofty target for a carbon-free power system by 2035 is increasingly in doubt.

“The net-zero targets get sacrificed on the altar of economic growth,” Ryan Sweezey, director of power and renewables for Wood Mackenzie, said in an interview. “If a utility has a corporate net-zero target, and it’s not tied to some state law, it’s really not worth the paper it’s written on.”

Electricity generation is the second-biggest source of carbon emissions in the US after transportation. The following companies have recently changed their climate goals, made plans that delay progress on those targets or said they are considering changes.

• American Electric Power Co. will begin taking direction from the states where it operates, which may lead to a change in the utility’s 2045 net-zero carbon target, CEO Bill Fehrman said in an interview. “When 10 of our 11 states are red states, to go into those states and tell them we want to discontinue burning coal and natural gas because AEP has a carbon target, that isn’t well-received,” said Fehrman.
• FirstEnergy Corp. scuttled its 2030 target for slashing greenhouse-gas emissions because coal plants can’t be replaced in time. “We’ve identified several challenges to our ability to meet that interim goal, including resource adequacy concerns,” FirstEnergy Chief Executive Officer Brian Tierney said during a conference call in February.
• Southern Co. is considering extending the retirement date of one of its coal plants, Chief Executive Officer Chris Womack said in an interview this month. Rising power demand provides a rationale to push back coal retirements, while the potential elimination of certain power-plant emissions rules under a Trump administration could make it easier to run those facilities longer into the future, he said. But the company has so far said it’s sticking to its climate goals.
• Duke Energy Corp. said last month it plans to extend the life of its largest coal-fired power plant after demand climbed, sidelining its target to shutter all facilities that burn the dirty fuel by 2035. The utility also said it would reexamine plans to convert some coal-fired units to also run on natural gas if Trump axes the plant emission rules, adding that it’s moving through the transition to cleaner forms of power and all its coal plants will reach the end of their useful lives in the 2030s. Like Southern, Duke has said its net-zero targets are unchanged.
• Dominion Energy Inc. provides power to Virginia’s Data Center Alley, the global center of the industry. To meet huge demand increases, the company has proposed investing in new gas generation and is weighing whether to delay retiring some gas plants and one large coal facility. “Anything that’s driving demand is going to make it harder to retire existing fossil units. That’s just sort of basic physics,” Chief Executive Officer Bob Blue said in an interview.
• Berkshire Hathaway Inc.’s PacifiCorp sees its carbon emissions dropping 63% from 2005 to 2030, compared to an earlier projected reduction of 78% over the same time period, after demand forecasts rose. The company also plans to extend the life of coal generation and add significant new natural gas generation while canceling renewable energy projects over the next two decades, according to an analysis by Bloomberg Intelligence.

--With assistance from Anne Riley Moffat.

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