Environmental Protection Agency (EPA) chief Lee Zeldin announced this week that the Trump administration will “reconsider” federal rules that pushed power companies to start planning to reduce their climate-altering pollution over the next couple of decades.

“[W]hen coal plants are open, viable and thriving,” the EPA wrote in a fact sheet accompanying the announcement, “we won’t have to rely on energy sources from adversaries.”

The U-turn throws open the doors for utilities to keep their coal plants running for decades without curbing their climate-altering emissions, part of a wider deregulatory surge the EPA announced this week.

In justifying its retreat from climate action, the EPA said it sought to “Make the United States the Artificial Intelligence Capital of the World,” and cited Trump executive orders related to AI and energy. It also said that “[c]oncerns have been raised” over the costs and feasibility of the technology that power plants would need to hit federal standards on greenhouse gas pollution, and described objections that the technologies are “not adequately demonstrated or are too costly.”

The EPA’s deregulations come after roughly a dozen electrical companies wrote a Jan. 15 letter to Lee Zeldin, Trump’s then-expected nominee to lead the EPA, part of a broader lobbying push first reported by Canary Media.

Carbon capture and sequestration, or CCS, “is the only option that allows a coal-fired plant to operate past 2039,” the utilities wrote, adding that CCS will also be required at new natural gas plants built after 2032, under emissions-reduction rules set by the EPA last year. The rules would also require all coal plants still in operation after 2039 to install technology like CCS to reduce emissions.

“But this option is unproven, extremely costly, and impossible to implement by 2032,” the utilities wrote to Zeldin.

Zeldin’s plans to use the EPA to promote AI were first announced back in early February but drew relatively few headlines amid all of the chaos and uncertainty stirred up by the Trump administration’s erratic moves to gut its own environmental agency and upend the distribution of federal funds. 

But it could prove to be costly to ignore for electricity customers across the U.S. — in no small part because burning more fossil fuels to power artificial intelligence (AI) would not only make climate change happen faster and be more destructive, but, new research shows, it also risks driving up power bills and adding to inflation.

AI Demand Makes Deregulation More Critical to Utilities

When utility giant PPL Corp. announced the Department of Energy planned to give the company $72 million for a carbon capture project at its natural gas power plant in Louisville, Kentucky, CEO Vincent Sorgi offered high praise for carbon capture.

Carbon capture and sequestration (CCS) are “technologies that can be scaled safely, reliably, and affordably to meet our customers’ energy needs,” he said in a February 2024 press release.

Less than a year later, PPL’s Kentucky subsidiaries struck a very different tone in the Jan. 15 letter to Zeldin, stating how expensive and difficult to implement the technology is.

It’s hardly the first time a power company has offered up conflicting messaging on carbon capture. Electrical utilities have a long history of asking regulators to assume they’ll be able to use carbon capture to address their climate-altering pollution someday in the future while expressing their own skepticism over the technology.

More recently, PPL and others have also begun arguing that a massive surge in demand from data centers and AI companies makes rolling back carbon capture requirements more urgent. “The numbers simply don’t add up on the nation’s current path to net-zero,” PPL said in a 2024 presentation to investors, citing AI demand expectations.

Today’s environmental regulations “hinder the expansion of electric power generation to support the critical development and deployment of Artificial Intelligence and related technologies,” the utilities wrote, pushing for Zeldin to review not only carbon capture requirements but also federal smog controls, rules for wastewater from coal-fired power plants, and regulations for “coal combustion residuals” or coal ash.

The letter to Zeldin was also signed by executives from major publicly-traded utilities like Duke Energy (NYSE: DUK), Vistra Corp. (NYSE: VST), and Talen Energy (NYSE:TLN), as well as local power collectives like Touchstone Energy’s Basin Electric Power Cooperative in North Dakota and the City Utilities of Springfield, Missouri, which calls itself “a progressive, community-owned utility.”

Their lobbying push has found a receptive audience in the Trump administration, which has made promoting AI a priority across a number of agencies, including those that regulate the energy industry. One of Zeldin’s first moves when he became EPA chief was to announce on February 4 that promoting AI would become one of “five pillars” of the agency’s mission on his watch.

The very next day the EPA requested that the U.S. Court of Appeals for the D.C. Circuit pause a pending court case over the 2032 CCS deadline, “to allow time for new EPA leadership to review the issues,” according to a Securities and Exchange Commission filing from Duke Energy.

The court granted the EPA’s request for a pause, setting an April 21, deadline — but the EPA’s announcement this week suggests the agency intends to scrap the rules before the court has a chance to weigh in.

Mixed Messages on CCS Amid Coal Revival

When the EPA set its 2032 deadline to install carbon capture at fossil fuel plants last year, experts said the move was an effort to prod the few remaining holdouts on coal power to start planning to adjust to the realities of climate change and to slow their contributions to it.

“The coal industry is already in a moment of structural decline,” Brendan Pierpont, director of electricity modeling for the think tank Energy Innovation, told E&E News in May 2024, as the rules were announced. “What the EPA is doing here is really bringing the laggards of the industry up to the decision-making point that the rest of the industry is already facing.”

The Biden-era rules pushed power utilities to decide in the near-term whether they’ll retire polluting fossil fuel power plants, particularly coal-fired power plants, or make concrete plans to install carbon capture at those plants. If carbon capture isn’t commercially viable, in other words, the rules would require utilities to move away from fossil fuels — and to start planning for those moves sooner rather than later.

Some of the utilities companies that signed the Zeldin letter publicly opposed the EPA’s deadline even before the November election. This included Duke Energy, which challenged the EPA’s rules as a member of a coalition of utilities calling themselves Electric Generators for a Sensible Energy Transition, according to Duke’s latest annual report.

But as forecasts for demand for power from data centers, which are used for AI, cryptocurrency, and other applications, have increased rapidly, utilities have begun slowing down their coal power plant retirements. Since the end of 2023, the coal capacity utilities nationwide plan to retire by 2027 has plunged by 12.6 percent, according to trade publication S&P Global.

In theory, utilities could keep that power generation without the climate-altering emissions — if they could deliver on carbon capture. 

But that’s a big if, given the power industry’s track record on carbon capture, which is strewn with failed and abandoned attempts.

Passing on CCS Costs to Consumers

Some of the same companies that are fighting the EPA’s carbon capture requirements in court have also asked utility regulators to let them charge carbon capture research projects to their customers.

“So you have basically three different messages as I’m seeing it,” Sue Sturgis, a research and communications manager at the Energy and Policy Institute, told DeSmog, describing how Duke’s messages on carbon capture to investors, to utilities regulators, and in the letter to Zeldin create different expectations about the technology’s viability. 

In 2023, Duke Energy was awarded $8.2 million in federal funding to study adding carbon capture to its Edwardsport coal plant in Indiana — after a prior study concluded that carbon capture wasn’t feasible at the plant.

When companies like Duke talk to utilities regulators about carbon capture funding, for example, they tend to strike a more optimistic tone, Sturgis said.

“They’re very cautious about it — but not so cautious that they won’t risk [millions] of other people’s money for it,” she said.

“When they’re talking to investors, they’re much more cautious about it. But then in that letter, [to Zeldin] they’re like, no, it’s just not possible,” Sturgis added.

And it’s not just federal taxpayer money on the line as utilities scramble to make carbon capture commercially viable (or at least viable enough to justify postponing coal power plant retirements). There’s also the question of whether state-level regulators will allow the company to pass CCS study costs along to customers in their power bills. “Duke got $8 million from the DOE. That’s not enough to do the study,” Sturgis said. “They need another $10 million from ratepayers to do the study.”

Duke recently got permission from the Indiana Utility Regulatory Commission to track costs for a carbon capture study at its Edwardsport plant in Indiana — bringing the company one step closer to including the costs of that study in customers’ power bills in the future.

“So maybe they don’t think carbon capture is so viable,” Sturgis said, “yet it’s viable enough for them to spend ratepayer money on a carbon capture and storage study, and also taxpayer money.”

The companies’ position in the letter to Zeldin that CCS remains unproven and extremely costly could come back to bite them in state-level rate cases, which are closely watched by utilities investors. Public advocates, environmental watchdogs, and others including industrial power customers, can intervene in rate cases and raise objections — and often do. That applies, Sturgis said, not just to Duke, but to rate cases involving other companies that signed onto the Zeldin letter.

Duke Energy did not respond to a request for comment.

Even going years back, Duke offered up conflicting messaging on carbon capture. “I think carbon capture and storage as a magical technology that solves the carbon problem for coal plants has been oversold,” Duke’s then-CEO Jim Rogers said in 2008 at a trade conference.

At this time Duke was a member of the American Coalition for Clean Coal Electricity, which aired a TV commercial in May 2008, a month prior to Rogers’ comment, with an artist’s rendering of the FutureGen CCS plant — a flagship project already shelved by the George W. Bush administration’s Energy Department. 

That ad described a world in which, according to a voiceover, “our most abundant fuel, coal, generates our electricity with even lower emissions, including the capture and storage of CO2. It’s a big challenge, but we made a commitment, a commitment to clean.”

AI and Your Power Bill

“The EPA is going to aggressively pursue an agenda Powering the Great American Comeback,” Zeldin told Breitbart News in an exclusive interview published February 4. “That is our agenda we wanted to announce with you — that’s what we call it, that’s our purpose, and it’s what will keep us up at night.”

“We have to make the United States the AI capital of the world,” Zeldin said.

The “Powering the Great American Comeback” initiative Zeldin referenced is a Trump administration plan to shoehorn promoting AI growth, “energy dominance,” incentivizing the automobile industry, and “partnering with businesses” into the EPA’s mission — a set of “five pillars” that the agency announced would “guide the EPA’s work over the first 100 days and beyond.”

During that same Breitbart interview, Zeldin first mentioned a now-notorious video post on X by Project Veritas in December 2024, in which an EPA employee appears to compare the rush to award green funding under Biden-era laws to, as Zeldin put it, “tossing gold bars off the Titanic.”

“Mentioning Project Veritas is a way for Zeldin to wear his political affiliations on his sleeve,” Fordham University communication and media studies professor Tim Wood told DeSmog. “None of the ‘five pillars’ Zeldin is promoting explicitly address wasteful EPA spending, so the Veritas video doesn’t even connect to Zeldin’s proposed policies.”

“It gets mentioned for the same reason that Zeldin announced the initiative exclusively to Breitbart,” Wood said, “so these issues become instantly politicized, polarized, and therefore taken off the table for any form of genuine public conversation.”

But while Zeldin has made a major austerity push at the EPA, his mission to promote AI carries significant costs — and not just in terms of the environment and climate change.

Not only is AI being offered by utility companies as a reason to justify rolling back the environmental standards the EPA is charged with enforcing, new research suggests the rush to build out AI data centers may already be driving up your electrical power bill.

A new paper from Harvard Law School’s Electricity Law Institute, titled “Extracting Profits from the Public: How Utility Ratepayers Are Paying for Big Tech’s Power,” lays out a case that the data centers used for AI and other Big Tech ambitions have left American consumers subsidizing trillion-dollar tech companies while increasing utility profits.

“Without systematic changes to prevailing utility rate-making practices,” authors Eliza Martin and Ari Peskoe told Utility Dive, “the public faces significant risks that utilities will take advantage of opportunities to profit from new data centers by making major investments and then shifting costs to their captive ratepayers.”

Additional reporting by Rebecca John.