To Counteract Trump on Climate, States Set Clean Energy Targets
This is Part Five of Stateline's 2019 Legislative Review.
Democratic state lawmakers passed a wave of bills this year they hope will reduce greenhouse gas emissions and combat climate change, even as the Trump administration moves in the opposite direction.
Most prominently, New Mexico, New York, Washington and the District of Columbia set standards requiring all electricity that utilities sell to consumers be generated from carbon-free energy sources, such as wind, solar and nuclear power, by 2050 or earlier. Maine and Nevada enacted laws aiming for the same goal, and Colorado did so for one utility.
Hawaii and California previously set 100% clean energy goals. Meanwhile, this year the U.S. Environmental Protection Agency scrapped the Clean Power Plan, an Obama administration policy aimed at reducing power plant emissions.
“Especially now, at a time when the federal government isn’t having the serious, evidence-based discussions necessary to address climate change, it’s up to the states to lead,” said New Mexico state Sen. Jacob Candelaria, a Democrat who sponsored clean energy legislation.
Many utilities have been open to the changes, largely because of the falling costs of renewable energy.
State laws may push utilities toward renewables, said Emily Fisher — general counsel for the Edison Electric Institute, a Washington, D.C., trade group for electric companies owned by investors — but “our members are usually heading in that direction anyway.”
But the clean energy laws have faced opposition. Some environmentalists say the laws don’t go far enough. Some consumer advocates worry the laws will raise electricity prices. And some Republicans say the laws will hurt workers in the coal industry.
The New Mexico law will accelerate the closure of a coal-fired power plant in state Sen. Bill Sharer’s largely rural district, eliminating hundreds of jobs, the Republican said. He filibustered the legislation for hours, arguing that the plant should get more time to study whether it could become carbon-free by capturing and storing its emissions. His amendment didn’t pass.
“We have an opportunity here — a real-live, honest-to-god opportunity — to have carbon capture and sequestration,” Sharer told Stateline. “They rejected everything about that, and I don’t understand that.”
Twenty-nine states and Washington, D.C., require that some share of the electricity utilities sell consumers be generated from renewable sources. Both left- and right-leaning states have such laws, but left-leaning states tend to have stricter standards.
On the other hand, Republican-led Ohio this year enacted a law that slashes renewable requirements and eliminates them after 2027, drawing sharp criticism from environmentalists. The bill’s backers say it will nevertheless get the state closer to zero-carbon electricity because it supports nuclear and solar energy. Under the law, ratepayers will be charged fees to subsidize nuclear and coal power plants that have been struggling financially, as well as solar projects in the state.
“We are reducing consumers’ bills, repealing wasteful government mandates and keeping good-paying jobs here in Ohio,” said Speaker Larry Householder in an online statement after the legislation passed the state House. “This is legislation that makes sense for the ratepayers of Ohio.”
Clean electricity goals, by themselves, won’t put a huge dent in nationwide carbon emissions. Electricity accounts for over a quarter of carbon emissions nationwide.
But 100% clean electricity laws still take a step in the right direction, their sponsors and environmentalists say, and could have a bigger impact over the long run if other technologies, such as cars and buses, switch to using electric power.
And because the power grid doesn’t stop at state borders, the targets should accelerate the closure of coal-fired power plants all over the country.
Lawmakers and regulators in Democratic-led states also have tried to address other sources of carbon emissions. California regulators recently struck a fuel-efficiency deal with automakers. And New York enacted a law that requires emissions reductions across the economy, from power plants to home heating systems to transportation.
“I think there was a very strong feeling in Albany this year that we didn’t want to go home without doing something major on climate change, because climate change is growing more dire while Washington is doing less and less to combat it,” said New York state Sen. Todd Kaminsky, a Democrat who sponsored the wide-ranging legislation.
Towns and cities have been making 100% renewable electricity pledges for over a decade. But state and local commitments have accelerated in recent years, thanks in part to a Sierra Club campaign. Today “100% clean energy” is a policy idea backed by Democrats at all levels of government, from governors to presidential candidates. It was included in the Green New Deal championed by Democratic U.S. Rep. Alexandria Ocasio-Cortez of New York.
Democratic gains in the 2018 midterms set the stage for legislation pushing utilities away from coal and gas-fired power plants. While some Republicans voted for 100% clean electricity, the laws passed only in states where Democrats control the House, Senate and governor’s office.
Most of those states passed 100% carbon-free targets — which utilities prefer to 100% renewable targets, Fisher of the Edison Electric Institute said, because a carbon-free target allows for carbon storage and nonrenewable technologies such as nuclear power. Hawaii, Maine and Washington, D.C., have targets for renewables only.
Experts say it’s possible to eliminate fossil fuel emissions from the power grid, although advances in storage technology may be needed before utilities can rely on renewables alone.
“It’s necessary to generate the clean electricity, to transmit it to where it’s needed and to balance the supply with the demand,” said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia Law School. “There are technologies for all three — they’re not cheap or easy — but it is technologically possible.”
The cost of wind turbines and solar arrays has dropped so dramatically that many utilities are adding those power sources regardless of state law. Twenty-three utilities plan to significantly reduce or eliminate carbon emissions by midcentury, including some in states without a mandate, according to the Clean Air Task Force, a climate change advocacy group.
Some states are closer to their clean energy goals than others. About three-quarters of electricity sold to Washington state consumers already comes from carbon-free sources, according to the Washington Department of Commerce, thanks to huge hydroelectric dams. Thirty-four percent of California’s electricity came from renewable sources last year, according to the California Energy Commission.
A Balancing Act
Major utilities in states that set 100% goals this year largely supported the changes. In New Mexico, home to three coal-fired power plants, executives from the state’s largest investor-owned utility, PNM, supported the law and plan to hit the zero-carbon energy target five years early.
“PNM was really well-positioned,” said Raymond Sandoval, spokesman for PNM Resources, PNM’s parent company. The utility already was planning to retire the coal-fired plant in Sharer’s state Senate district and several natural gas plants in the coming decades, he said, creating an opportunity for a smooth transition to renewable power.
The legislation will help PNM pay for the coal plant’s closure by letting it use a financial tool called securitization, analogous to refinancing debt on a mortgage, Sandoval said.
But some environmentalists in New Mexico are unhappy with language in the law that will make it easier for utilities to pass the cost of decommissioning power plants and other assets on to ratepayers.
“The ratepayers should have a forum, should have an opportunity to be heard,” said Mariel Nanasi, executive director and president of New Energy Economy, an environmental group based in Santa Fe. “Right now, it is a blank check.”
Sandoval said that in the long term, the legislation should save ratepayers money, because it’s expensive to keep the aging coal plant open. “What we think is, ratepayers actually got a great deal.”
Candelaria, the legislation’s sponsor, said lawmakers need to strike a balance between protecting ratepayers and protecting utilities. Companies need to be financially secure to make ambitious investments in clean energy generation, transmission and storage, he said. “I think the bill does strike that appropriate balance.”
The law requires PNM to spend $40 million on severance packages and job training for workers at the coal plant. But Sharer says talk of job training is “garbage.”
“What job are these guys going to get?” he said. Rather than remain in the county and take jobs that don’t pay as well, he said, many workers will leave.
Similar tensions have played out in other states. In Colorado, a new law that gives Xcel Energy a regulatory roadmap for reducing emissions included language some environmental and consumer advocates say will reduce oversight of the company and could lead to higher rates.
Colorado’s AARP chapter opposed the legislation. “It’s going to adversely impact older and low-income consumers,” said Bill Levis, a volunteer on AARP Colorado’s advocacy team.
Xcel last year announced plans to run on carbon-free energy by midcentury. “Why give the utility less oversight ... when they’ve already promised this?” said K.K. DuVivier, a professor at the University of Denver Sturm College of Law.
Colorado House Speaker KC Becker, the Democratic sponsor of the legislation, said the law gives utilities regulatory clarity and caps rate increases. “It’s not a license to raise rates.”
Now Comes the Hard Part
California faces a huge implementation challenge, as Pacific Gas & Electric (PG&E) — the largest investor-owned utility in the state — has filed for bankruptcy and faces billions of dollars in liability claims from wildfires caused by its equipment.
Climate change is worsening California wildfires, which hampers utilities’ ability to address climate change, said Ethan Elkind, director of the climate program at the Center for Law, Energy and Environment at the University of California, Berkeley.
It’s difficult and expensive for companies that build solar farms and other infrastructure to contract with a utility that may go bankrupt, he said.
Implementation will challenge other states too.
In New York, a new advisory council must now make recommendations on how to implement the law that sets emissions reduction targets for the state economy.
“The details of how we’re going to get from A to B just don’t exist,” said Gavin Donohue, president and CEO of Independent Power Producers of New York, a trade association that represents the power generation sector. State Senate Minority Leader John Flanagan, a Republican, appointed Donohue to New York’s new Climate Action Council.
The potential economic obstacles, technical limits and price increases are all unclear, Donohue told Stateline. “Some would say we’ve hit the low-hanging fruit and getting to the next step is going to be an awesome task.”
In the near term, utilities subject to 100% clean energy goals and standards are likely to step up their use of renewable energy, Fisher of the Edison Electric Institute said. Their changes are likely to affect nearby states, she said. “The grid is interconnected.”
Washington utility Puget Sound Energy, for instance, partly owns a coal-fired power plant in rural Colstrip, Montana — a town of some 2,200 that’s heavily reliant on the plant and a nearby mine for jobs and tax revenue.
While two of the plant’s aging units already were scheduled to close in 2022, Puget Sound Energy and its co-owner this summer announced plans to accelerate the closure.
“Our customers want a better, clean energy future,” said Ron Roberts, Puget Sound Energy’s director of Generation and Natural Gas Storage, in a statement at the time. “Helping our state transition from coal, along with the billions we’ve invested in renewable energy, is helping make that vision a reality.”