Report 2022 Legislative Energy Trends

Introduction

State legislatures took significant action on a variety of state energy policy priorities in 2022. Legislatures considered more than 1,900 energy-related measures in 2022 covering a wide range of policies, with almost 500—roughly 25% of the introduced bills—ultimately enacted. These actions represent the diversity of state energy policy approaches, informed by policy priorities, economic conditions, natural and human caused drivers, and recent federal action.

Several states enacted significant legislation related to reducing greenhouse gas emissions and supporting the growth of clean and renewable energy. A number of states also pursued opportunities to continue support for existing nuclear-powered electricity generation as well as facilitate the development of new nuclear generation. Transportation electrification continues to be an area of active policymaking, including policies related vehicle purchases and the development of charging infrastructure, often referred to as electric vehicle supply equipment (EVSE).

In the coming years, state legislatures will continue to engage on issues that will be transformed by the federal Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA). In 2022, a number of legislatures took initial steps to take advantage of the new federal energy programs and funding provided by these laws. State legislative action related to these major federal laws is likely to accelerate in 2023.

This white paper examines state legislative action in 2022, highlighting trends in state energy policy and identifying topics likely to take priority in 2023 and beyond. All legislation referenced in this paper was enacted, unless otherwise noted.

Climate Change and GHG Emissions Reduction

Legislation to address climate change and reduce greenhouse gas (GHG) emissions continues to be a major focus in many state legislatures. After significant action in 2021, state legislatures passed additional measures in 2022 to set GHG emissions reduction targets, support the growth of renewable and clean energy production and identify specific policy changes to reduce GHG emissions from a variety of sectors.

States followed up on an particularly active legislative cycle in 2021, during which Illinois, Rhode Island and Oregon all set zero emissions targets, and North Carolina set a goal of reducing emissions by 70%.   

State legislatures in a number of states took additional action in 2022 as the trend in seeking emissions reductions continues in many states. In 2006, the California Global Warming Solutions Act set a statewide GHG reduction target of 40% below the 1990 level by 2030. In 2022, California A.B. 1279 set a new target for the state to reduce statewide GHG emissions by 85% from 1990 levels by 2045. Maryland also adopted new targets in 2022; S.B. 528 set a target to reduce GHG emissions by 60% (compared to a 2006 baseline) by 2031 and to reach net-zero emissions by 2045.

Similarly, after enacting significant climate legislation in 2021, Massachusetts took additional action in 2022 by enacting H.B. 5060, which included a host of energy provisions. First, the bill amended state policy to further support the development of offshore wind by removing a price cap on electricity from new projects, prioritizing projects that create manufacturing and workforce benefits, and creating pilot workforce training programs. Second, the bill included a variety of provisions related to transportation electrification, including a ban on the sale of new gasoline- or diesel-powered vehicles after 2035, increasing the state electric vehicle rebate, and steps to expand charging infrastructure. Third, the bill aimed to reduce emissions associated with building energy use, including by allowing municipalities to ban new fossil fuel hookups in new construction and amending the state’s energy efficiency incentives to preference electric appliances.

One commonly used state policy tool is the renewable portfolio standard (RPS). Thirty states, Washington, D.C., and two territories have active renewable or clean energy requirements, while an additional three states and one territory have set voluntary renewable energy goals. In 2022, Rhode Island enacted H.B. 7277A to adopt annual increases in the state’s Renewable Energy Standard until 2033, when the standard requires 100% of Rhode Island’s electricity be offset by renewable resources.

The combination of new state emissions reduction targets, policies to support renewable generation, and increases in the stringency of state RPS requirements all highlight the continuing trend in many state legislatures to seek ways to address greenhouse gas (GHG) emissions.

Carbon Capture and Sequestration

In addition to considering measures to reduce emissions, a number of state legislatures explored policies to support the capture, use and sequestration of carbon dioxide, referred to as carbon capture and sequestration (CCS) or carbon capture utilization and storage (CCUS). CCS is the process by which carbon dioxide emissions are captured from large point sources that use fossil fuels—typically power generation or industrial facilities—and then compressed for injection into deep geologic formations where the carbon dioxide can be stored or, in the case of CCUS, used on-site in a variety of applications.

The U.S. Department of Energy (DOE) has been funding research and development on CCS and CCUS technologies for years and Congress recently provided additional support. The IIJA appropriated more than $10 billion for carbon capture, direct air capture and industrial emissions reduction. The IRA subsequently increased the federal income tax credits available for domestic CCUS projects (often referred to as “45Q credits”) and extended the deadline to begin construction on 45Q credit-eligible projects from 2026 to 2033.

At the state level, a number of states enacted legislation in 2022 to encourage or support CCUS. For example, Alabama S.B. 36 expanded the types of gases that can be stored in underground caverns to include carbon dioxide, and designated the Alabama Oil and Gas Board as the state authority to regulate the process. Similarly, Indiana (H.B. 1209), Utah (H.B. 244), and West Virginia (H.B. 4491) created permitting and regulatory processes for underground carbon dioxide storage. As federal support for CCS continues, NCSL anticipates ongoing state action in this area.

Hydrogen

One energy option that has gained increasing attention is the production and use of hydrogen. Hydrogen is a fuel that can be produced from a variety of resources, including natural gas, nuclear power, biomass and renewable resources. Hydrogen is an energy carrier that can be used to store, move and deliver energy produced from other sources, and can be used to generate electricity, power vehicles and in many other applications. The IIJA included funding for Regional Hydrogen Hubs and Electrolysis and Clean Hydrogen Manufacturing and Recycling programs. The IRA then created a hydrogen production tax credit (PTC) and expanded an investment tax credit (ITC) to include hydrogen projects and hydrogen storage technology.

State legislatures, seeing these opportunities, took a variety of actions to position their states to be leaders in the hydrogen economy. Many of these bills created committees or task forces to study the opportunities associated with hydrogen. For example, Arizona S.B. 1396 established a hydrogen study committee to recommend legislation related to the production, distribution and storage of hydrogen, while Hawaii S.B. 2283 commissioned a study of the potential for the production and use of renewable hydrogen. Similarly, Connecticut (H.B. 5200) and Illinois (S.B. 3613) established task forces to study hydrogen power. With ongoing federal support for hydrogen and industry efforts to take advantage of the available tax credits, NCSL expects state legislatures to continue to consider policies related to the production and use of hydrogen.

Renewable Energy

State legislatures continued to seek avenues to support the development of renewable energy in 2022. A number of states enacted policies aimed at promoting specific renewable technologies, including wind, solar, geothermal and other electric generation technologies.

One area of particular focus in 2022 was offshore wind. In 2021, the federal departments of Energy, Interior, and Commerce announced a national goal to deploy 30 gigawatts of offshore wind by 2030. On the state level, a number of state legislatures explored opportunities to manage offshore wind development.

Louisiana H.B. 165 allows offshore wind development in state waters for the first time. The bill gives the state Mineral and Energy Board authority make leases for offshore wind development and requires the Louisiana Natural Resources Department to set state offshore wind regulations, including lease rules and royalty terms. The bill sets the maximum size for wind leases in state waters at 25,000 acres and requires wind facility proposals to include plans for decommissioning turbines.

California is also joining the offshore wind game. A.B. 525 requires the California Energy Commission (CEC) to evaluate the maximum feasible offshore wind energy generation capacity in waters off the California coast and requires the CEC to establish offshore wind planning goals for 2030 and 2045. This action by legislature was followed in December 2022 by a U.S. Department of the Interior announcement on the results of the first offshore wind lease sale in the Pacific, including bids from five companies totaling $757.1 million.

The New Hampshire legislature also created new requirements related to the development of offshore wind. S.B. 440 requires the state’s Office of Offshore Wind Industry Development to make recommendations on the criteria for evaluating power purchase agreements for procurement of electricity from wind turbines in the Gulf of Maine including whether those agreements are cost-effective for electric ratepayers; foster employment and manufacturing; and minimize impacts to wildlife and commercial and recreational fishing. S.B. 268 requires the state’s Public Utilities Commission (PUC) to meet certain requirements in approving power purchase agreements for offshore wind development including those related to the mitigation of impacts to wildlife, natural resources and commercial and recreational fishing.

Another emerging area of interest related to renewable energy involves geothermal energy. Geothermal energy is heat from below the earth’s surface which can be used to generate clean, renewable electricity. The IIJA included $84 million for enhanced geothermal systems and a number of states are exploring state policy options related to the development of geothermal energy. Colorado H.B. 1381 created a geothermal energy grant program and appropriated $12 million in state funding to support grants for installing geothermal systems in new buildings, building community district heating systems, and generating electricity and hydrogen from geothermal energy. South Carolina S.B. 463 took a different approach, extending a 25% state income tax credit that was set to expire for the purchase and installation of residential renewable energy equipment, including geothermal systems.

These recent state legislative actions are just a few examples of the ongoing engagement of state legislatures in promoting and managing the development of renewable energy technology.

Nuclear Power

The past year witnessed a continuation of several trends related to state action around nuclear power, with at least 12 states enacting 14 bills during the 2022 session. These trends have included state support to retain existing nuclear power plants, repealing restrictions on new nuclear development and growing support for and interest in advanced nuclear technologies, including small modular reactors (SMRs).

These policies have been enacted in states across the political spectrum—reflecting that nuclear power has become an increasingly bipartisan issue in recent years. That bipartisan support was also on display with the passage of several federal legislative packages, including the IIJA and IRA, each of which included several significant provisions to support existing reactors and the development of new, advanced technologies.

First, West Virginia enacted S.B. 4, which repealed a long-standing prohibition on building new nuclear power facilities in the state. With its passage, the state joined Kentucky, Montana and Wisconsin in having recently repealed restrictions that prevented the development of new nuclear power facilities. Connecticut lawmakers enacted a partial repeal with the passage of H.B. 5202, providing an exemption to its statewide restrictions by authorizing the development of new nuclear at the site of the state’s existing nuclear power plant. There are currently 10 states with active restrictions on the construction of new nuclear power facilities.

Another big legislative decision came with the passage of Indiana S.B. 271. The law aims to support the development of SMRs at retired fossil fuel-fired power plants in the state. Lawmakers directed state regulators to develop rules to facilitate the construction and operation of SMRs at retiring coal and natural gas facilities, in addition to offering financial incentives for public utilities to help recover the costs of developing new commercial reactors in the state. The legislation is similar to a “coal-to-nuclear” bill enacted in Wyoming in 2020, to which lawmakers made several technical amendments last year. The coal-to-nuclear concept is of growing interest to several states and communities with historical ties to fossil fuel production and development, and the DOE added to the public discourse with a recent report that suggested around 80% of nearly 400 retired and operating coal plants in the U.S. could be good candidates to host SMRs.

Alaska lawmakers enacted S.B. 177, which is aimed at streamlining the regulatory process for permitting microreactors—defined by the legislation as having a capacity of 50 megawatts (MW) or less. Microreactors are another form of advanced nuclear technologies, which could potentially be used to provide remote Alaskan villages, towns or industrial sites with carbon-free heat and power.

Michigan, Nebraska, New Hampshire and Virginia all expressed interest in advanced nuclear technologies as well, enacting legislation to support studies exploring the role these technologies could play in their states. Connecticut also passed a nuclear power study bill, though the primary focus is to determine how the state can position itself to support the development of clean hydrogen at scale, with nuclear power included as a potential source of energy for hydrogen production.

One of the biggest developments over the past year involved state support for existing reactors. Four states have active policies to prevent the premature closure of nuclear power plants. In 2022, California enacted S.B. 846 to revise the shutdown dates for its last remaining nuclear reactors at the Diablo Canyon nuclear plant. Under a 2018 agreement between the plant’s owner, state regulators and environmental groups, Diablo Canyon’s two reactors were scheduled to shut down in 2024 and 2025. However, the nuclear plant represents 9% of the state’s total electricity. The prospect of shutting down that much clean capacity after several reliability scares gave pause to some policymakers. Amid grid reliability concerns and the availability of new federal funding from the IIJA, California lawmakers decided to allow Diablo Canyon to operate through 2030, so long as the operators meet several requirements.

With a variety of provisions designed to support nuclear power included in the IIJA and IRA, it seems likely that state lawmakers will continue to pursue legislation that will position their states to benefit from federal support and new nuclear development over the coming decade.

Electric Vehicles

As was the case in 2021, electric vehicles (EVs) were among the top focal areas for state legislatures in 2022. In total, state legislatures considered at least pieces of legislation related to electric vehicles last year. While a focus on electric vehicle policies has simply continued a trend from recent years, new patterns continue to emerge as states broaden the policy landscape around EVs and begin targeting additional opportunities to spur EV adoption.

Responding to New Federal Funding

As federal funding rolls in from the IIJA’s NEVI program, which provided $7.5 billion to help states build out EV charging networks and incentivize a transition to electric vehicles, states have also begun working to leverage this funding to further support EVs and EV infrastructure development. States were required to submit plans for their use of NEVI funds to the U.S. Department of Transportation by Aug. 31, 2022. Several pieces of legislation, like West Virginia H.B. 4797, helped direct the planning process or supported these plans with funding and related EV infrastructure programs.  

States are increasingly creating dedicated public funding sources and taking other measures to expand EV infrastructure. Some of these bills are explicitly designed to supplement or provide matching funds for federal NEVI funding. Several states, like Kentucky (H.B. 241), appropriated funding for fiscal years 2022-2023 specifically providing matching funds for federal EV charging programs under the IIJA. Massachusetts H.B. 5151 makes at least $50 million available for a program to support EVs and help fund public alternative fuel and electric vehicle charging infrastructure. The legislation also includes language allowing funds to be used as matching funds for the federal IIJA program and its transportation electrification programs. 

Others do not specifically mention incoming federal funds but clearly aim to leverage external funds to support EV and EVSE expansion. For example, West Virginia H.B. 4797 requires the state Department of Economic Development to create an Electric Vehicle Infrastructure Deployment Plan that describes how the state intends to use its share of NEVI program funds, considering the future charging needs of school systems, public transportation, local governments and other users.  

The IIJA also created a Clean School Bus program that will provide grants to states for EV and other zero-emission school buses. Following this, Colorado legislators created an Electrifying School Buses Grant Program by enacting S.B. 193, which provides funds to schools for the purchase of electric school buses and associated charging infrastructure. Eligible projects include the purchase and maintenance of electric school buses, the conversion of fossil-fuel powered school buses to electric buses, the purchase and installation of charging infrastructure and electrical upgrades to support associated charging infrastructure.  

Maryland H.B. 1392 created a Medium-Duty and Heavy-Duty Zero-Emission Vehicle Grant Program for certain vehicles and equipment, which can help transition buses, delivery and similar work fleets to EVs. California S.B. 372 also established a Medium- and Heavy-Duty Zero-Emission Vehicle Fleet Purchasing Assistance Program to make financing and nonfinancial supports available to operators of medium- and heavy-duty vehicle fleets to transition to zero-emission vehicles like EVs. Washington H.B. 1644 allows the transportation vehicle fund to be used for feasibility planning and fueling station infrastructure to serve electric and other “clean pupil transportation vehicles.” This would help school districts plan for a transition to electric school buses. New Jersey also enacted a bill (A.B. 1282) to create a new electric school bus program, administered by the state Department of Environmental Protection, that will provide $15 million per year in grants for EV school buses.  

EV Incentives and EV Accessibility 

On the individual passenger vehicle side, Maryland’s H.B. 1392 also decreased the maximum purchase price for certain EVs from $63,000 to $50,000 for the purpose of receiving the state’s excise tax credit. This brings the state’s cap more in line with the EV tax incentives offered through the federal Inflation Reduction Act (IRA). Massachusetts H.B. 4515 is a broad decarbonization bill but contains a new $5,000 rebate for electric vehicle purchases, with an additional $1,500 available to low-income individuals, and additional rates for medium- and heavy-duty vehicles. At this stage, nearly every state offers some form of electric vehicle incentives to help offset costs for people who purchase EVs. This may explain a relative downturn in the pace of new legislation creating EV incentives, as many states that already have them may be allowing state agencies to modify existing programs. 

As states look to address EV infrastructure challenges that might slow EV adoption, some legislation around electric vehicle supply equipment (EVSE)—a common term for EV chargers—was designed to make it easier for individuals and businesses to install EVSE for public use and encourage private investments, or otherwise ensuring that newly developed charging infrastructure is available and accessible to as many people as possible. A few different approaches have been taken, including direct grants, loans and financing measures, and regulatory requirements or exemptions. Connecticut, for example, enacted S.B. 93 to include EVSE and other investments in the state C-PACE program, opening up a financing option for commercial property owners who want to install EVSE on their properties. With H.B. 1221, Indiana built on a trend from recent years by exempting public EV charging providers from being regulated as utilities, while also allowing people who offer public EVSE to charge for the electricity used or the time spent charging. Washington S.B. 5192 was broadly designed to support EVSE deployment, allowing EVSE owners and operators to charge for their use.  

On the regulatory front, Washington S.B. 5192 also requires the development of new regulations governing payment methods, interoperability requirements and other standards. Delaware S.B. 187 requires certain local governments to develop a way for residents to obtain permission to install EVSE on residentially zoned property that abuts a residential street, and prohibits certain rules that would unduly restrict EVSE installation. Illinois S.B. 2940 requires the state PUC to ensure, when approving utilities’ beneficial electrification plans, that these plans address how to increase the number of public DC fast chargers, also known as Level 3 EVSE.  

The federal NEVI program requires that federally funded EV stations meet certain reliability and uptime standards. For example, EVSE funded through the NEVI program must be operational and in proper working order at least 97% of the time—a standard some charging operators still struggle to meet consistently; several states have begun to enact or consider legislation requiring the same of state-funded projects. Aside from ensuring that new stations are reliable, state requirements could help state-funded EVSE projects access and leverage federal NEVI funds. For example, California A.B. 2061 and New York S.B. 9204 (pending, 2022) both include station monitoring and reporting requirements, while New Jersey S.B. 3102 sets a more specific 95% uptime standard. 

Fleets and Heavy-Duty Vehicles 

While several bills aim to incentivize residents and businesses to purchase electric vehicles—one of the trends that has continued from past years—states increasingly considered legislation in 2022 to help convert larger public and private vehicle fleets to EVs. Because public agencies and private fleets can account for large numbers of vehicles, some states are looking to leverage this scale to reduce emissions and support broader EV adoption. 

States are continuing to enact and revise incentives for electric vehicle purchases, with a growing focus on heavy-duty or state-owned vehicles. For example, at least three states—Connecticut (S.B. 4), Hawaii (H.B. 552) and Maine (S.B. 456)—set targets to transition state-owned fleets to electric vehicles. Specifically, Connecticut now requires that 50% of state-purchased vehicles must be EVs starting in 2026, gradually reaching 100% by 2030. It also prohibits the state from procuring any diesel transit buses starting in 2024. California enacted legislation (S.B. 1010) that may influence both state vehicle procurement and the practices of private rental fleet owners by requiring the state to evaluate bidders for state commercial car services in part on the number of EVs in their rental fleets.  

Addressing EV Transition Impacts on Road Infrastructure Funding 

As this happens, states continue to grapple with a downward trend in road funding revenue, much of which comes from fuel taxes. Fuel tax revenues have long been declining due to improved vehicle fuel efficiency. With the expansion of the EV market, that trend is now accelerating. To address this challenge, states have taken different approaches, including levying taxes on the electricity used to charge EVs or creating alternative ways to collect road funding revenues from EV drivers—in some cases dedicating EV registration fees toward road infrastructure and EV charging infrastructure development. In 2022, Oklahoma and Kentucky both enacted new 3 cents-per-kWh taxes on the electricity used to charge electric vehicles. Both would direct much of these revenues to state road funding accounts, while Kentucky’s tax would be indexed to changes in the National Highway Construction Cost Index (NHCCI). Louisiana enacted legislation (H.B. 1031) taking a different approach, imposing a road usage fee on certain electric and hybrid vehicles that would charge vehicles for the number of miles driven rather than gas consumption. Other states like Minnesota considered EV charging tax legislation, and still others are studying the issue. This could be an area where we see additional action in 2023. 

Energy Efficiency

Policies to reduce energy consumption through efficiency, conservation and electrification continue to be priorities for state legislators. These policies have been popular for many years, often seen as “low-hanging fruit” for policymakers interested in reducing carbon emissions and customer energy bills at the same time. However, over the past several years, these policies have taken on new relevance—and new forms—for two primary reasons.

The first reason largely has to do with policymakers’ interest in decarbonizing buildings. While the electric sector has made significant headway in reducing its carbon emissions, the transportation and building sectors have not experienced the same reductions and represent the next frontiers in decarbonizing energy usage economy-wide. In some cases, state policymakers are incentivizing building electrification—the conversion of certain functions, such as space and water heating, to be powered through electric appliances, rather than natural gas or other fossil resources.

The second reason is more immediately pressing: Inflation and high natural gas prices have caused energy bills to grow substantially over the past year, leaving customers struggling to pay their bills.

State lawmakers considered over 620 bills related to energy efficiency, conservation and building decarbonization during the 2022 legislative session. Of those, more than 25 states, the District of Columbia and Puerto Rico enacted legislation last year. These policies can largely be grouped into the following categories: establishing or updating efficient building codes and appliance standards; establishing financial incentives and programs to support efficiency; establishing guidelines or requirements for government buildings; and supporting building electrification and sustainability in new and existing buildings.

One of the most common types of bills related to establishing or updating building codes or appliance standards to support energy efficiency. California, Maine, Virginia and Washington all directed state agencies to update or adopt certain standards, while New York S.B. 9405 established an Advanced Building Codes, Appliance and Equipment Efficiency Standards Act” to create more robust standards to encourage conservation and promote clean energy by including life-cycle cost analyses that include anticipated cost-savings. Maryland required the adoption of standards for swimming pools and spas that include more stringent conservation and efficiency measures, in addition to bolstering the state’s energy efficiency programs through enhanced enforcement and regulation.

States also established incentives to encourage energy efficiency investments from residential and commercial properties. At least seven states enacted or amended policies to provide loans or grants to support residential energy efficiency; in several cases, these policies included a clear emphasis on prioritizing low-income communities. Colorado S.B. 159 created a revolving loan fund to ensure affordable housing is energy efficient in both new and existing buildings by providing flexible, low-interest and below-market rate funding to borrowers. New Mexico H.B. 37 established a similar program that uses block grants to support efficiency in low-income households, in addition to establishing a tax credit for sustainable building practices that support efficiency and energy-efficient appliances. New Hampshire H.B. 549 amended the state’s existing energy efficiency resource standard (EERS) to shift how the program is funded and modifying how the program is administered, requiring that no less than 20% of the funds collected go to low-income programs.

Meanwhile, Alaska, Hawaii, Maryland and Virginia all enacted measures to support energy projects, including energy efficiency, in commercial and industrial buildings through policies like Commercial Property Assessed Clean Energy (C-PACE) financing programs or other financing mechanisms.

Many states, including Hawaii and Illinois in 2022, continue to establish efficiency requirements or recommendations for government-owned buildings, while Maryland extended funding for an efficiency program targeting schools by two years. Similarly, at least three states—Maryland, Oklahoma and Virginia—adopted or modified provisions relating to state agencies entering into energy performance-based efficiency contracts.

New York authorized a report to explore a state-funded renewable energy laboratory to facilitate research and development in renewable and energy efficiency technologies and practices. Oregon and Rhode Island established advisory committees to evaluate policies and make recommendations to decarbonize new and existing buildings while enhancing resilience and efficiency.

Finally, electrification and decarbonization of buildings has become a growing topic of interest in state legislatures across the country. Maine, Washington and the District of Columbia established requirements and guidelines to promote all-electric buildings. Maine H.B. 1227 establishes that construction projects funded by the state housing authority must meet at least one or more conditions, including the use of all electric equipment and systems. Washington H.B. 1280 established new state policy that publicly owned or leased buildings should prioritize all-electric energy systems, renewable power and combined heat and power systems. Meanwhile, the District of Columbia required all new construction or substantial improvements to existing buildings to be constructed to a net-zero energy standard.

Energy Security

Many states in 2022 focused on bolstering the resilience of energy systems to various threats including natural- and human-caused disasters, extreme weather conditions and their impact on grid capacity and reliability. Over the last two years, there have been multiple high-profile attacks on the energy system, from cyberattacks like the one that affected the Colonial Pipeline to physical attacks on substations at the tail end of 2022 in North Carolina, Washington, Oregon, and other states—not to mention hundreds or even thousands of smaller, less impactful events. These events have highlighted perhaps more than ever the need to strengthen and protect our energy systems. On top of these human-caused threats, states across the country have been affected by natural disasters that have disrupted energy supplies and caused billions of dollars in damage to related energy infrastructure.

Fortunately, state legislatures are uniquely positioned to help improve the physical security and cybersecurity of their states’ energy infrastructure, and have jumped into action to mitigate these threats. Several states enacted bills to help fund or finance resilience improvements, increase cyber and physical security of the energy system, or ensure a quick response to energy emergencies. In total, state legislatures considered over 300 pieces of legislation broadly related to energy security in 2022. Over 100 bills were enacted.

IIJA and IRA implementation

In 2022, state legislatures began exploring the opportunities and challenges presented by the federal Infrastructure Investment and Jobs Act and Inflation Reduction Act. The $1.2 trillion IIJA includes more than $62 billion for the DOE to implement a variety of energy programs. The IRA directs nearly $400 billion in federal funding to clean energy, delivered through a mix of tax incentives, grants and loan guarantees. Together, these laws provide major new federal support for renewable energy, clean energy, transmission development, clean transportation and other priorities. Over the past year, state legislatures explored a variety of steps to take advantage of these new opportunities, including in the areas of nuclear energy, transportation electrification, and others.

For example, the IIJA created the $6 billion Civil Nuclear Credit (CNC) Program to help maintain the country’s fleet of existing nuclear reactors. As discussed above, in September 2022 California enacted S.B. 846 aimed to leverage CNC funding to extend operations at the Diablo Canyon Power Plant. The plant was scheduled to retire in 2025, but may now remain in operation until 2029 or beyond. In November 2022, DOE announced that the first award under the new the CNC program would be made to Pacific Gas & Electric (PG&E), Diablo Canyon’s owner. PG&E could receive approximately $1.1 billion in credits to extend the plant’s operation for five years. This example highlights the role of state legislatures in taking action to capitalize on new funding made available by the IIJA.

The IIJA also created a new Clean School Bus Program administered by the Environmental Protection Agency (EPA) that will provide $5 billion over five years to replace existing school buses with zero- and low-emission models. A number of states, including New York and Colorado, subsequently took legislative action to support the goal of electrifying school bus fleets. Colorado S.B. 193 created a $65 million state grant program for electric school buses to complement the new federal program. New York’s 2022 State Budget included a requirement that all new school bus purchases be zero emission by 2027 and that all buses in operation be electric by 2035. The budget also included $500 million to help districts meet these requirements. These legislative steps are examples of how legislatures are positioning themselves to benefit from new federal funding made available by the IIJA.

This process was only just beginning in 2022. NCSL expects significant state legislative action related to IIJA and IRA implementation in 2023. A number of legislatures have held hearings or formed new committees to explore these opportunities. For example, in January, Minnesota’s Senate Energy, Utilities, Environment, and Climate Committee and House Climate and Energy Finance and Policy Committee held hearings to better understand how to take advantage of these new federal resources. NCSL anticipates more legislative action in this area in 2023.

Conclusion

As summarized in this report, state legislatures took a variety of actions to address energy policy priorities in 2022, with nearly 500 measures enacted. These actions consisted of policies to reduce greenhouse gas emissions and support clean and renewable generation, improve energy efficiency and conservation practices, further develop transportation electrification, and improve the reliability, security and resilience of energy systems.

Following the passage of the IIJA and IRA, states are poised to leverage the opportunities presented by these new federal laws, helping direct funding and implementation priorities to further advance state energy goals.