This article was initially published by Canary Media and is reproduced here as part of the Climate Desk collaboration.
Since 2021, the Sierra Club has systematically assessed U.S. utilities based on their commitment to transitioning to clean energy. While many utilities demonstrated some advancement in their annual evaluations, recent findings indicate a concerning trend.
The latest edition of the Sierra Club’s “The Dirty Truth” report reveals that the major electric utilities in the country are performing worse on climate objectives than they did at the inception of this tracking initiative five years ago. Alarmingly, for the first time, they collectively received an aggregate grade of “F.”
Overall, U.S. utilities have largely regressed from the progress made during the Biden administration. Few are on target to transition from fossil fuels to carbon-free energy at a necessary scale and pace to address the severe risks posed by climate change.
“It’s extremely disappointing to see lower scores than in our initial report,” expressed Cara Fogler, managing senior analyst at Sierra Club, and co-author of the report, although she noted that this trend was somewhat expected.
Utilities had already begun to stagnate in their carbon reduction commitments last year, primarily due to a surge in electricity demand driven by the expansion of data centers catering to the burgeoning AI industry. The trend, however, has accelerated under the anti-renewable sentiment and pro-fossil fuel agenda of some political leaders.
“The current federal administration appears to be doing everything possible to steer utilities away from cleaner energy options,” remarked Fogler. “Measures from the Inflation Reduction Act that encouraged clean energy development are being systematically rolled back, and the administration shows active resistance to clean energy initiatives like the Revolution Wind project in New England, which is currently facing a halt in construction.”
However, utilities must also accept their share of the responsibility, according to Fogler. “From a cost, health, and pollution perspective, we see compelling reasons to increase clean energy production. Unfortunately, it seems many utilities are less concerned about sustainable practices than they are about their financial bottom line.”
What’s the Score?
In its recently released “The Dirty Truth” report, the Sierra Club scrutinized 75 of America’s largest utilities, which are responsible for more than half of the country’s coal and natural gas generating capacities. The evaluation gauges utilities’ commitments against three pivotal benchmarks: the intention to cease all remaining coal-fired plants by 2030, plans for new gas plant constructions, and anticipated clean energy capacity additions by 2035.
As of mid-2025, these utilities plan to construct sufficient solar and wind capacity to meet only 32% of what is projected to be necessary by 2035 to replace fossil fuel generation and meet increasing demand. Although 65% of utilities have increased their clean energy initiatives since 2021, 31% have reduced their goals.
Moreover, efforts to diminish fossil fuel reliance have regressed significantly. Utilities are increasingly opting to keep old coal plants operational while moving forward with plans to construct additional gas plants in response to growing demands. At present, only 29% of coal generation capacity is scheduled for closure by 2030, a decline from 30% the previous year and 35% in 2023.
Furthermore, the planned gas-fired generation capacity surged to 118 gigawatts as of mid-2025, up from 93 gigawatts in 2024, and more than double the 51 gigawatts outlined in 2021.
The rising demand for electricity, particularly driven by the proliferation of data centers, has only fueled this rapid expansion of gas-fired power. However, much of this projected data center demand remains largely speculative, hinging on the financial viability of substantial AI investments from tech giants including Amazon, Google, Meta, Microsoft, and innovative leaders like OpenAI and Anthropic—a gamble fraught with uncertainties.
The Sierra Club advocates for a careful approach from both utilities and regulators regarding new constructions aimed at satisfying this speculative demand, emphasizing the impacts on utility costs for standard consumers in certain areas. Notably, many of the proposed gas plants remain unbuilt.
“We will naturally experience some load growth due to population increases and necessary electrification,” acknowledged Noah Ver Beek, senior energy campaigns analyst at the Sierra Club and co-author of the report. “However, we also urge utilities to maintain realistic load growth forecasts.”
Regrettably, skyrocketing demand provides utilities with “cover” to continue their investments in polluting infrastructures. Since utilities enjoy guaranteed profits from their capital expenditures on power plants and grid enhancements, they often shy away from questioning overly optimistic growth forecasts or pursuing less expensive or more sustainable alternatives.
Notably, some of the most ambitious fossil fuel expansions are concentrated in the Midwest and Southeast, involving utilities like Dominion Energy in Virginia, Duke Energy in North Carolina, and Georgia Power.
Even utilities that previously received glowing evaluations for their clean energy and coal phase-out commitments have faltered. For instance, Indiana’s NIPSCO, which scored an “A” in the past four evaluations, slipped to a “B” in the latest report due to its strategy of relying on gas power plants to accommodate expected data center demand.
However, NIPSCO’s commitment to avoid hastily investing in high-load growth scenarios until actual contracts are established is deemed a wise choice, preventing consumers from facing burdensome costs for power plants that might remain unnecessary. Yet, this scenario also poses a risk as they plan to depend entirely on gas under these high-load growth forecasts, amplifying the need for cleaner energy options.
Unfortunately, many utilities are not leveraging the solar and wind tax credits that will expire in mid-2026, as specified by the recent legislation passed by Congressional Republicans. Only a select few utilities, like Xcel Energy in both Colorado and Minnesota, are accelerating their clean energy initiatives to capitalize on these tax incentives. “Our goal is to have more utilities utilize this window of opportunity to expedite their planned projects,” Fogler expressed.
Accelerating the transition to clean energy is imperative not only to meet growing demand but also to curtail rising costs for consumers, Ver Beek highlighted. Utilities and tech giants continue to align their near-term expansion strategies with new gas plants, despite the looming challenges of lengthy equipment manufacturing delays and rapidly escalating turbine costs.
“For both economic and environmental reasons, we urge utilities to advocate for ramping up clean energy installations as much as possible,” he emphasized.
