Perhaps the biggest trend in 2019 dealt with state initiatives to reduce emissions from the electric sector, with a handful of states taking sweeping, decisive action toward decarbonization. Legislatures in 48 states, D.C. and Puerto Rico considered over 1,500 bills related to clean energy, renewable energy or emissions reductions in 2019 and over 200 of these measures were enacted or adopted. State legislation focused on a variety of clean energy technologies—including solar, offshore wind, biomass, hydropower, energy storage and nuclear power. States also looked to a variety of policy mechanisms to support a clean energy economy in proposing legislation that includes mandates, incentives and market-based strategies.
States are increasingly focused on policies aimed at reducing greenhouse gas emissions (GHGs) and, in particular, on reducing emissions from the nation’s largest-emitting sectors: transportation and power. During the 2019 legislative session, 33 states and Puerto Rico considered over 300 bills focused on reducing GHGs, with over 40 measures enacted or adopted. A number of states enacted binding GHG reduction targets and legislatures showed continued interest in carbon pricing policies.
In 2019, Colorado (HB 1261), Maine (SP 550), Nevada (SB 254), New York (SB 6599) and Puerto Rico (SB 773) enacted ambitious targets aimed at reducing GHGs across economic sectors, with more states considering similar legislation.
In addition to establishing emissions targets, states focused on creating a framework for agencies to implement the regulations necessary to achieve required reductions. For example, Colorado’s HB 1261 directs the state air commission (AQCC) to develop regulations that achieve incremental reductions culminating in 90% reductions in GHGs below 2005 levels by 2050. This new law also requires the AQCC to regularly engage with the General Assembly, biennially report on the state’s progress toward achieving its targets and make recommendations for future legislation to address climate change.
While most states focused on enacting statutory targets for the first time, others, like Maine, focused on establishing binding long-term targets. Maine law previously required a return to 1990 emissions levels by 2010 and a 10% reduction below that by 2020, but lacked any concrete long-term targets. Under SP 550, the state is required to reduce GHGs below 1990 levels by 45% by 2030 and 80% by 2050.
A growing number of regionally and politically diverse legislatures are also looking to carbon pricing policies to drive down emissions in their states, with 17 states considering over 40 bills on the topic. Carbon pricing policies broadly encompass a variety of mechanisms, such as taxes, fees and cap-and-trade markets, that put a per-ton price on GHG emissions. Most states with proposed legislation in this area considered policies to impose a direct tax or fee on emissions, with some states targeting specific sectors and others aiming to impose a tax that would apply economywide. Roughly half the carbon-pricing-related bills under consideration in 2019 either failed or were vetoed, but the other half are being taken back up in 2020. In addition to the number of carbon tax proposals considered in states like Montana, Texas and Massachusetts, a smaller number of states considered cap-and-trade legislation. Such proposals set overall emissions limits that decline over time and require regulated entities to obtain emissions allowances—allowing them to emit a specific amount of GHGs—that can be bought and sold through an allowance market.
A handful of eastern states, including Virginia, Vermont and Pennsylvania, considered legislation relating to the state’s participation in regional cap-and-trade programs, including the Regional Greenhouse Gas Initiative (RGGI) and the Transportation and Climate Initiative (TCI). Pennsylvania SB 950 (pending) would require explicit approval from the General Assembly before joining RGGI or implementing another cap-and-trade program. The Virginia governor vetoed two bills prohibiting the state’s involvement in RGGI and TCI without the legislature’s authorization, while pending legislation in Vermont (HB 461) would authorize the state’s participation in TCI.
A few states considered cap-and-trade legislation targeting emissions across multiple economic sectors. In 2019, Oregon and Washington considered legislation to create in-state, multi-sector programs that would have linked with other carbon markets, including cap-and-trade programs currently implemented in California and the Canadian province of Québec. In particular, Oregon’s HB 2020 would have capped total GHG emissions from fossil fuels, electricity and industrial processes in the state. It would also have established a declining annual allowance necessary to achieve new GHG emissions reduction targets culminating in 80% reductions below 1990 levels by 2050. Despite passing in the House, HB 2020 died after failing to pass the Senate. Washington’s similar cap-and-trade bill (SB 5981, pending) would also establish aggressive GHG reduction targets in the state.
In addition to reducing GHGs, state legislatures are increasingly interested in policies that decarbonize the power sector and support a transition toward clean energy technologies. States were particularly focused on updating or expanding their Renewable Portfolio Standard (RPS) policies, which require renewable resources to supply a certain percentage of utilities’ electricity sales. Some states broadened their policies to allow for “clean” or “zero-emitting” technologies to meet certain targets. These new Clean Energy Standard (CES) policies often allow all zero-emitting sources to count toward a particular target, including nuclear power.
Legislatures considered laws to set more aggressive long-term RPS targets and amend statutory definitions of “renewable” or “clean” to expand or restrict qualifying resources. At least 23 states considered over 100 bills related to RPS or CES policies, with at least eight states and Puerto Rico enacting laws that establish new percentage requirements. The vast majority of these bills (eight out of nine) increased the state’s renewable or clean energy target to 50% or greater. Some states with voluntary policies considered legislation that would make compliance mandatory. Virginia considered such legislation in 2019 and is taking the issue up again in 2020.
Enacting new, aggressive long-term clean energy targets that expand the list of qualifying resources beyond traditional renewable energy is emerging as a major trend in state energy policymaking. While RPS policies aim to deploy renewable energy, CES policies focus on reducing power sector GHGs. In 2019, five states—Colorado, Nevada, New Mexico, New York and Washington—enacted 100% clean energy targets that allow for the use of “clean” or “zero-emitting” energy sources to meet the most aggressive targets. For example, Washington’s recently enacted SB 5116 requires that 100% of the electricity sold in the state come from non-emitting or renewable resources by 2045. Washington’s new CES broadly defines non-emitting resources to include those that do not “emit greenhouse gases as a by-product of energy generation,” but notably excludes newly constructed large hydroelectric facilities. Some states have designed their CES policies to prioritize specific sources that are driving GHG emissions in their state, while others are considering CES policies that would open doors for non-renewable energy sources, namely nuclear.
In close alignment with current state policy prioritizing methane emissions reduction (Executive Order 2019-003), New Mexico’s recently enacted CES (SB 489) includes within its definition of “zero carbon resource” electricity generation that reduces methane emissions by a certain amount. Meanwhile, Pennsylvania lawmakers debated CES legislation (SB 510) that would have targeted support for nuclear power as the state’s largest source of clean energy. Several of the state’s nuclear plants are at risk of shutting down prematurely, and the state has spent years debating whether to support and preserve its largest source of carbon-free power.
States are also reassessing the role of energy efficiency measures in expanding their CES policies. This includes updating their Energy Efficiency Resource Standards (EERS), requiring that utilities save a certain percentage of electricity or natural gas to support their more aggressive targets. In enacting a new 100% CES and setting a more aggressive 50% RPS, Nevada preserved the role of energy efficiency to give utilities flexibility in achieving near-term targets, but eliminated efficiency measures from the program after 2025. Other states with recently enacted CES targets also passed complementary EERS policies, with New Mexico requiring new long-term energy savings targets for 2026 through 2030 and Washington expanding its EERS to include natural gas for the first time.
Ohio offered an interesting contrast to these trends when it enacted HB 6, which expanded support to its nuclear plants while reducing the state’s RPS and eliminating its EERS over the next seven years. The bill also touches on another trend (discussed further in the Fossil Fuels section) by ensuring payments to two struggling coal plants. The bill provides financial support for nuclear generation in the state using ratepayer dollars that were previously supporting RPS and EERS programs.
In enacting new clean energy incentives and mandates, state legislatures are also considering policies that focus on ensuring lower-income communities have access to—and stand to benefit from—clean energy programs.
Delaware and Washington enacted laws focusing on availability of—and funding for—energy assistance programs for lower-income residents. Other states enacted new laws designed to make renewable energy and energy efficiency technologies more accessible to lower-income consumers. Maine recently enacted a new law requiring state agencies to identify and consider lower-income consumers in energy efficiency programming. Virginia passed HB 2741, creating a pilot program providing financial support for lower-income households to install solar energy systems.
Additionally, at least 12 states considered more than 30 bills related to community solar in 2019, with at least three states passing new laws. New Hampshire enacted SB 165, designed to increase access to solar in low-income communities, while Colorado, through HB 1003, increased allowable capacity for community solar projects. Maryland also enacted two community solar bills, with the first prohibiting limitations on the number of subscribers allowed for community solar projects (SB 520). The second increases project generating capacity and extends a pilot program to 2024 (HB 683).
States have also increasingly focused on engaging lower-income and disadvantaged communities in mapping out their clean energy future. Colorado’s recently enacted HB 1261 requires the state Air commission to identify communities that may “experience disproportionate environmental harms and risks,” including minority and low-income communities, and engage these groups in developing regulations under the statute. Moreover, New York’s Climate Leadership and Community Protection Act establishes a number of working groups to engage with environmental justice communities disproportionately affected by environmental pollution. It also requires that disadvantaged communities receive at least 35% of the benefits of clean energy and efficiency program spending.