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Infrastructure Investment and Jobs Act (IIJA) or Bipartisan Infrastructure Law (BIL) Implementation

It is now just over two years since the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law (BIL), was enacted. The Biden administration has funded over 40,000 projects and awards, spending over $400 billion so far. IIJA programs offer funding and support for topics ranging from EV charging infrastructure grants, idling truck emission reduction, state and tribal grid resiliency, orphan and abandoned well remediation, and rural energy development, among many others. Additional opportunities were also created in 2023 for states through new federal initiatives and funding streams. States have continued to receive assistance through IIJA, creating new programs and taking advantage of funding opportunities to address energy issues and kickstart new projects. In 2023, NCSL tracked 106 IIJA project related bills that highlighted state interests in funding opportunities.  

A major headline this year was the announcement of regional clean hydrogen hubs, which will share $7 billion in Department Of Energy funding for hydrogen development. Before the announcement, many states urged the federal government to select their state. Colorado, Connecticut, Hawaii, Illinois, Mississippi, Nebraska, Ohio, Oregon, Pennsylvania, Texas, Washington, and Wyoming legislators passed resolutions or introduced legislation expressing interest in being selected as a hydrogen hub or announcing plans and funding for hydrogen research related to hub selection. For example, Washington SB 5200, the state’s capital budget, included a provision for $20 million as a state match should the state be selected as a hydrogen hub. 

Ultimately, seven selected hubs were announced in October 2023. The hubs include the Appalachian Hydrogen Hub (West Virginia, Ohio and Pennsylvania), California Hydrogen Hub, Gulf Coast Hydrogen Hub (Texas), Heartland Hydrogen Hub (Minnesota, North Dakota, South Dakota), Mid-Atlantic Hydrogen Hub (Pennsylvania, Delaware, New Jersey), Midwest Hydrogen Hub (Illinois, Indiana, Michigan), and the Pacific Northwest Hydrogen Hub (Washington, Oregon, Montana). These hubs will advance research, each focusing on different aspects of hydrogen. For example, the Appalachian Hub will study hydrogen production using natural gas and permanent storage of carbon resulting from production. California’s hub will examine the use of hydrogen in heavy-duty trucking and public transportation, aiming to expand hydrogen fuel cell vehicle technology. States will also examine making hydrogen more feasible and cost effective and will create workforce and education initiatives.  

This year, states also worked to set aside dollars to use toward matching funds and supporting various other IIJA projects, as many of the federal grants require a cost match or share from states. States have invested millions so far to capitalize on federal support, undertaking all types of projects. Funding legislation varied from allocations for specific IIJA-related programs to general funds authorized for cost matching as the state receives grants. For example, North Dakota SB 2063 authorizes the state to make every effort to acquire funding for federal EV charging programs and continue appropriations to the state’s fund for the program. The bill also authorizes the state to work with private entities when relevant to carry out the program goals. Utah HB 426 created the state’s Energy Research Grant Program and authorizes an ongoing appropriation of $1 million to provide matching grants to programs receiving federal and private support. States are expected to continue taking steps to fund energy, climate, and infrastructure programs through the oncoming years, with IIJA funding for some programs spanning over ten years. 

Climate Change and GHG Emissions Reduction

States continue to introduce and enact legislation to reduce greenhouse gas (GHG) emissions and address climate change. In 2023, 40 states and Puerto Rico introduced over 400 bills concerning climate change and emissions reductions.  

States have started to look towards the manufacturing of building materials as an avenue for reducing greenhouse gas emissions. According to the Environmental Protection Agency, the manufacturing of building materials such as concrete, cement or asphalt accounts for 11% of global greenhouse gas emissions annually. These emissions are a result of the energy used for extraction and production of these materials. As a result, states have started to introduce legislation aiming to promote the use of low-emission concrete, cement and other materials in building construction.  

In 2021, California enacted SB 596 requiring the State Air Resources Board to develop a comprehensive strategy to achieve net-zero emissions for cement used within the state by 2045. As part of this strategy a baseline must be developed to measure greenhouse gas intensity reductions. This past year California enacted AB 43 clarifying specifications for the baseline. Emissions reductions targets will begin to apply at least two years after the baseline is set.  

New Jersey also enacted legislation (SB 287) to set global warming potential baselines for concrete mixtures used in contracts with state agencies. The baselines are used to determine tax credits for the use of low embodied carbon concrete that implements carbon capture and storage technology. Embodied carbon refers to the carbon emitted during the production and manufacturing of the materials.  

Maryland’s HB 261 also addresses low emission building materials for state-funded projects by establishing a maximum acceptable global warming potential for any cement or concrete mixture used in the construction of a capital project funded by the state. 

In addition to targeting emissions reductions in specific sectors, states have also started to implement overall emissions reductions. While the pace of legislation has decreased, states continued to enact bills on this in 2023. In 2023, Delaware enacted HB 99 establishing the Delaware Climate Change Solutions Act. The act requires the state to reduce its greenhouse gas emission by at least 50% of 2005 levels by 2030. The state must then reach net zero emissions by 2050. At the end of 2023, at least 19 states have enacted GHG reduction requirements.  

Along with statewide emissions reduction targets, many states have enacted clean energy and renewable portfolio standards that require a certain amount of electricity in the state to come from renewable or clean energy sources. In 2023 Michigan (SB 271) and Minnesota (HF 7) both enacted clean energy standards requiring 100% of electricity to come from clean energy sources by 2040.  

Carbon Capture and Sequestration 

Carbon capture and sequestration (CCS), or carbon capture utilization and storage (CCUS), continues to be considered by state legislatures as a method for reducing emissions while possibly maintaining the operation of fossil fuel facilities. CCS is a process that captures carbon dioxide emission from large point sources that use fossil fuels, such as power plants or industrial facilities. The captured carbon dioxide is then compressed and injected into deep geologic formations to be stored. During CCUS, compressed and stored carbon dioxide is used on-site for a variety of applications.  

In 2023, 30 states introduced 142 bills regarding CCS. Arkansas (SB 407) and Oklahoma (SB 19) both enacted legislation defining bioenergy paired with carbon capture and storage as a carbon negative energy source. Indiana enacted SB 541 to establish a carbon sequestration pilot project with two carbon dioxide pipelines at a proposed ammonia production facility. The carbon will then be stored in pore spaces underground through injection wells. Virginia enacted HB 2386 to create the Virginia Power Innovation Fund and Program to fund the research and development of certain energy technologies, including carbon capture utilization and storage.  

Renewable Energy 

In 2023, all 50 states, the District of Columbia and three territories considered 1,244 bills concerning renewable energy. Legislation advancing renewable energy continues to be a significant trend with many states working to meet specific goals for renewable energy or emissions reductions.  

Wind Energy 

Offshore wind energy had an up-and-down 2023. Construction continued on the Vineyard Wind and South Fork Wind projects while three new east coast offshore wind projects received federal approval. Early trends have emerged in state legislatures to address offshore wind and ensure effective development. In 2023, states considered 173 bills related to wind energy.  

Maine LD 1895 established a goal of achieving at least 3,000 megawatts of installed offshore wind capacity by 2040. Virginia SB 1441 accelerated the state’s offshore wind timeline by requiring the construction or purchase of offshore wind facilities with an aggregate capacity of up to 5,200 megawatts by 2032.  

However, despite this progress, the offshore wind industry faced many challenges. Inflation and high supply chain costs restricted offshore wind development and led to the cancellation of Ocean Wind 1 and 2 projects off the coast of New Jersey.  

With U.S. offshore wind still in its early stages, state legislatures have begun moving legislation pointing to the need for a strong domestic supply chain to complete these projects. Many states introduced legislation in 2023 to address domestic manufacturing and supply chains for offshore wind turbines. California AB 3 requires the development of a plan and strategy for seaport readiness for offshore wind turbine assembly.  

The development of offshore wind will bring new transmission challenges to states as they will need to connect the new energy sources to the grid. Maryland and Delaware both enacted bills requiring PJM Interconnection, their regional transmission organization, to analyze the transmission upgrades and expansion necessary to accommodate the states’ planned procurement of offshore wind projects. Maryland’s Public Service Commission and Delaware’s Department of Natural Resources and Environmental Control will both cooperate with PJM on this analysis. Maryland includes specific solutions for the analysis to consider, such as using an open access collector transmission system, reducing permitting risks and high costs and leveraging existing infrastructure. 

Onshore wind development continued to grow in 2023 as well. As the number of wind turbines throughout the country has increased, so have the concerns about light pollution from wind turbines. The Federal Aviation Administration requires turbines to have lights so they are visible to pilots. However, these blinking lights can be distracting to local residents. Kansas (SB 49) and Washington (HB 1173) both enacted bills to address light pollution from wind turbines with both states requiring the installation of light-mitigating technology systems on new wind energy facilities. Texas also introduced HB 2549 to require light mitigating technology on wind turbines.  

Solar Energy 

The majority of the country’s solar capacity has been installed since 2020, making solar the fastest growing source of electricity in the country. Solar made up nearly half of the new power capacity installed in 2023. In 2023, 43 states, three territories and the District of Columbia introduced 489 bills related to solar energy. 

Most of the new solar capacity in 2023 came from large-scale solar facilities. Since these large-scale solar facilities are often located in rural areas and require large open areas of land, policy makers have started to explore the potential of agrivoltaics—the process of co-locating solar facilities with crops on farmland. Nine states introduced legislation investigating the use of solar energy facilities on farmland. New York SB 7081 established an agrivoltaics research program to develop science-based solutions to promote the combined use of crops and solar facilities while also facilitating the biodiversity of flora and fauna. Additionally, Michigan enacted SB 277 to permit the use of solar facilities on farmland.  

In addition to large scale solar development, small-scale and distributed solar was a prominent area of interest for states in 2023. Distributed energy resources are small-scale resources, such as rooftop solar panels, that generate energy for nearby use while usually connecting directly to the local power grid to provide power for other consumers.  

Colorado enacted HB 1234 aiming to speed up the rate of residential solar development by creating a streamlined solar permitting and inspection grant program. The program provides grants to local governments to use free automated permitting and inspection software for residential solar installations.  

The increased popularity of rooftop solar as a form of distributed energy has become a point of contention between homeowners and HOAs throughout the country as many HOAs have policies in place prohibiting the installation of solar panels on homes. Arizona, Illinois and Michigan all introduced legislation concerning HOA restrictions on home solar energy devices. Illinois enacted SB 1544, for instance, prohibiting HOAs from denying property owners permission to install solar panels or requiring them to use specific technology.  

States also continued to introduce and enact legislation promoting community solar development, particularly for low- and moderate-income households. Maryland enacted HB 908 requiring solar energy systems developed under the community solar pilot program to serve at least 40% of its output to low- and moderate-income subscribers unless the system is owned completely by subscribers. New Hampshire had previously specified that low-moderate income community solar projects must serve a community where most residential end user customers are at or below 300% of the federal poverty guidelines. In 2023, New Hampshire SB 161 expanded the definition of low-moderate income community solar project to include projects that directly benefit the residents of public housing authorities or housing projects.  

Energy Storage Targets, Incentives 

Storage is becoming a critical part of the modern grid, helping fill gaps in intermittent generation and improving resilience to disruptions. Further, with recent disaster impacts, there is renewed focus on energy storage for resilience, especially over longer time periods—technologies that can discharge over the course of 10 hours to multiple weeks, as well as incorporating storage into resilient microgrids that can help maintain power for key facilities or vulnerable areas. 

In 2023, at least 37 states introduced over 200 bills focusing on energy storage, with at least 16 states enacting 34 of those bills. 

Many of those bills aim to address planning issues, such as requiring utilities to consider energy storage in their resource planning activities or incorporating it into state procurement processes. For example, Maryland HB 910 set a new target of deploying 3000MW of energy storage by 2033. Maine SB 751 expands and paves way for quicker increases in the state’s energy storage procurement target, citing reliability and resilience benefits as well as the potential to reduce or stabilize consumer costs. Additionally, some states like California (SB 38) have begun requiring emergency response plans for storage facilities to ensure those are safe and secure.  

Others have introduced bills to remove regulatory hurdles and speed interconnection of storage resources, like Vermont (SB 112), which exempts storage installations larger than 100kW from certain certification requirements. New Hampshire (SB 40) targeted a specific form of energy storage with legislation requiring state regulators to develop new interconnection and net metering policies for small hydroelectric facilities. West Virginia HB 3087, though it failed, would have created a “right to connect” for certain distributed storage installations.  

Financial incentives, tax exemptions or tax credits are also often provided, while grants and other financing mechanisms have been explored. Meanwhile, some states have funded pilot projects or research and demonstration projects. One recent example is Rhode Island SB 856, which makes energy storage eligible for State Infrastructure Bank grants and amends the state’s utility rate statute to help fund energy storage and other clean energy projects. New Mexico HB 228 will allow counties in the state to provide special property tax assessment mechanisms to help finance energy storage and microgrids on commercial, agricultural and residential properties. 

Renewable Energy Waste 

Life cycle and waste management has also become a new concern for legislatures regarding renewable energy systems. While most renewable energy systems installed in the country are relatively new, the lifespan of solar panels and wind turbines ranges from 20-35 years, so states are preparing for the end-of-life management of these systems.  

Indiana enacted SB 33 requiring a study on the decommissioning of solar panels and wind power devices in the state. The study must also consider the creation of a state program to manage renewable energy decommissioning. Texas and Washington also enacted studies on the decommissioning of wind turbines.  

Maine (HP 313) and North Carolina (HB 130) both enacted legislation requiring owners of solar and battery projects to submit decommissioning plans. Decommissioning plans describe the process of removing the renewable energy infrastructure and restoring the property to an acceptable condition. Maine HP 313 requires a decommissioning plan to be submitted for construction of an energy storage project greater than two megawatts before it can be constructed. In addition to decommissioning plans, states may also require applicants to submit financial assurance to demonstrate future capacity to decommission the project. Financial assurance may come in the form of bonds or a letter of credit. This past year Connecticut passed HB 5608 requiring solar energy facilities planning to locate on prime farmland to furnish a bond covering all costs for the decommissioning of the facility and the restoration of the farmland. 

Energy Efficiency and Building Electrification

In addition to transitioning to cleaner sources of energy, states are continuing to implement policies to reduce energy consumption through efficiency and electrification practices. Interest in energy efficiency practices has grown due to their potential to reduce both carbon emissions and customer energy bills. In 2023, legislatures considered 315 bills related to energy efficiency.  

A popular approach to energy efficiency implementation is through updated building codes. Illinois, Mississippi and Rhode Island all enacted legislation to establish new standards for energy efficiency in newly constructed and improved buildings. Meanwhile, Maryland enacted HB 6 to establish new energy conservation standards for all state buildings.  

States also considered policies to help track and improve energy efficiency in residential buildings. Maine enacted HP 696 to create a home energy scoring system. The system will evaluate buildings’ energy use and identify solutions to improve energy efficiency.  

In addition to improving the energy efficiency of buildings, lawmakers in 34 states also considered 182 bills related to building electrification. Electrification is the conversion of certain building functions currently powered by fossil fuels, such as heating, to be powered by electric appliances. One of the primary approaches to building electrification is to replace traditional gas heating systems with heat pump technologies. Rather than relying on gas, heat pumps use electricity to transfer heat in or out of buildings. Oregon enacted HB 3409 setting the goal of installing 500,000 new heat pumps in the state by 2030. The bill also requires a biennial report that evaluates the rate of heat pump adoption by residents and identifies any barriers preventing heat pump adoption. While home heating has emerged as a primary electrification target, states are also making it easier to electrify other parts of the home. Colorado enacted HB 1134 requiring home warranty contracts to allow homeowners to replace gas fueled appliances with a similar device that uses electricity instead.  

Energy Resilience and Security Trends

Energy Resilience 

The last decade was by far the most destructive ever for weather-related disasters—both in terms of cost and frequency. From Winter Storms and Hurricanes striking the Gulf Coast and even California, to western wildfires, flooding in the Northeast, and dozens of other disasters, the impacts stretch far and wide. There have also been warnings from the North American Electric Reliability Corporation (NERC) and state and regional grid operators about potential capacity issues during extreme conditions. There were 18 disasters that cost over $1 billion each in 2022, but in 2023 there were over 20 disasters resulting in over $1 billion each in damages just through November. Meanwhile, state legislatures have been working hard to improve the resilience of their energy systems as these disasters become more costly. 

On the planning side, several state legislatures recently enhanced energy mitigation and planning requirements to ensure utilities are ready for disruptive events. Some, like Washington HB 1117 and Indiana HB 1007 require formal reliability assessments along with detailed plans to address deficiencies and improve overall grid reliability, often including collaboration between government and private sector energy stakeholders. Texas HB 3096 requires reporting on the reliability and stability of the electricity supply chain as a whole, going beyond just actual energy resources into equipment and other aspects of the energy supply chain.  

A couple other states considered bills aimed at ensuring reliability and energy security amidst a transition to renewables. Nebraska LB 566 would authorize the Natural Resource Committee to study the impacts of an increasing reliance on intermittent renewable generation and whether the current trajectory threatens reliability. This bill may be carried over and acted on in 2024. Some other recent examples include Colorado HB 1039 (enacted 2023) requiring each load-serving entity in the state to provide the applicable regulatory body (PUC, municipality, coop, or other) with an annual resource adequacy report. The state also enacted HB 1247 requiring the Colorado Energy Office to conduct studies to assess advanced energy solutions in rural Colorado to help ensure long term stability.  

Some of these planning requirements focus on specific hazards, often in response to local disasters. Most recently, after major wildfires in the West involving energy infrastructure, Washington HB 1032 (enacted 2023) requires utilities to specifically undertake wildfire planning and mitigation activities; these plans have to be updated and approved regularly by the state. 

A few new policies—for example where potential capacity issues have been identified as older generation sources are retired and weather extremes intensify—explicitly require state entities to ensure a diverse mix of energy resources, or as in the case of Kentucky SB 4, put in place policies to ensure that retired generation is quickly and adequately replaced. Indiana similarly enacted legislation (SB 9) that provides for review of utilities’ retirement and related planning decisions if they could negatively impact reliability and energy resilience. Similarly, Virginia HB 2130, while it ultimately died, passed one chamber and could have extended renewable portfolio standard deadlines if they would harm reliability or security of electric service.  

Another common option is allowing utilities to recover costs to strengthen grid infrastructure or providing funding and other financing mechanisms for energy resilience improvements. One example is through new or existing Property Assessed Clean Energy (PACE) or Commercial PACE (C-PACE) programs, which allows property owners—usually businesses but sometimes individuals—to finance resilience improvements through increased property tax assessments. Recently, New Mexico HB 228 (enacted 2023) allowed counties to create PACE-like tax benefit for energy resilience improvements. Another bill from Connecticut (HB 6853) provides grants, loans, and other financing to local governments and regional entities in the state to deploy microgrids or other energy resilience improvement projects. These funds can be used for planning, matching other funding sources, and other specific uses. New Jersey AB 4866 (enacted 2023) provides hazard mitigation financing via the state infrastructure bank, that can be used for energy projects. So, there are multiple ways states are looking to help ease the financial costs associated with resilience improvements. 

Energy Security and Human Threats 

Human threats against energy infrastructure have quickly become a key issue for legislatures, both from a cybersecurity and physical security standpoint. On the cyber front, the Colonial Pipeline incident is still fresh in many people’s memories but more recent incidents highlight how states will continue to be challenged by this issue. Increasingly, states are pushing their PUCs and utilities to incorporate new physical and cybersecurity measures into their planning process, or are incorporating more reporting or oversight. A number of states have passed bills establishing study committees or task forces to explore the topic and make recommendations.  

For example, Maryland HB 969 requires its PUC to have cybersecurity staff expertise. Vermont HB 291 was enacted in 2023 and creates a cybersecurity advisory council, while Washington SB 5518 both defines the crime of ransomware and creates cybersecurity advisory committee. Along with these new coordination and notification policies, states have created open records exemptions for sensitive information, a continued trend from recent years. North Dakota HB 1353 (enacted 2023), for example, requires electric utilities to report to state regulators annually on both their physical and cybersecurity measures and emerging threats, while keeping certain security-related information protected from public view. Rhode Island HB 5684 (2023) requires mandatory reporting from state and municipal agencies to state police on cyber incidents. This could apply to agencies like the PUC, or possible municipalities that oversee their own utilities.  

Physical security is another concern for legislators. North Dakota HB 1353 creates new requirements for utilities to include physical security preparedness measures in their integrated resource plans. Also, almost half the states now (up from barely a dozen a couple years ago) have enacted legislation increasing or establishing new penalties for trespassing, damaging, or disrupting energy infrastructure. North Carolina SB 58 (enacted 2023) provides new penalties – up to 15 years in prison and a $250,000 fine – for anyone who damages energy facilities in the state. The new law, passed in response to recent substation attacks, covers both electric infrastructure and other energy infrastructure like oil and gas. Texas SB 947 creates new criminal penalties as well, including a manslaughter provision if a cyber or physical attack damages energy infrastructure and the incident results in someone’s death. Georgia HB 227 created new penalties for damaging energy infrastructure and defines domestic terrorism, as does Oregon HB 2772, which also defines domestic terrorism to include energy infrastructure attacks. These Georgia and Oregon bills are notable because they seek to distinguish at the state level what constitutes or defines domestic terrorism. 

Nuclear Energy Trends

The increase in state legislation related to nuclear energy over the past couple of years has been exceptional. The number of bills tracked by NCSL on this topic has more than doubled in recent years and that trajectory continued into 2023.  

Thirty-nine states considered over 140 bills related to nuclear energy or spent nuclear fuel and waste management last year—a jump from just under 100 bills the prior year and just over 70 bills in 2016. However, the biggest growth came in the number of enacted pieces of legislation: at least 20 states passed 26 nuclear-related bills in 2023, compared to 12 states enacting 14 bills the prior year. 

The vast majority of these measures are focused on nuclear energy production and offer varying degrees of support for existing nuclear power plants and the development of next-generation nuclear technologies. In many cases, that support has come in the form of state-commissioned studies or working groups to identify barriers to new development or consider workforce challenges. In others, the support is more directly aimed at bolstering the commercial nuclear industry, from providing funding for the continued operation of existing nuclear reactors to adding nuclear energy to the list of preferred resources that the state considers “clean.”  

At least three states—Michigan, North Carolina, and Tennessee—took action to include nuclear energy as a “clean” energy resource in 2023. Michigan and North Carolina amended existing law to expand state renewable portfolio standards (RPS) into clean energy standards (CES), which incorporate a broader array of carbon-free and low-carbon resources. Meanwhile, Tennessee HB 946 codified that nuclear and other resources must be included as eligible resources under any clean energy ordinances established by political subdivisions in the state. Utah required the State Energy Office to prepare a strategic plan to achieve the state’s energy policy, including a requirement to look at how the state can adopt nuclear power and other advanced energy resources, while North Dakota adopted two resolutions that reference nuclear power as “environmentally sustainable.” 

One of the most consistent trends over the past several years has been states removing longstanding restrictions on the development of new nuclear facilities. With the passage of HB 2473, Illinois became the fifth state since 2016 to substantially repeal restrictions on the development of new nuclear power facilities, joining Kentucky, Montana, West Virginia and Wisconsin. In addition to repealing the state’s restrictions on new nuclear, the Illinois legislation requires the state to establish rules for the regulation of Small Modular Reactors and authorizes a study on the regulatory gaps to developing SMRs in the state. 

These measures build on a trend from prior years: states enacting bills concerning rules and regulations for advanced reactors and commissioning studies to identify challenges to developing next-generation nuclear technologies. At least four states—Alaska, Indiana, Wyoming and now Illinois—have required state agencies to establish rules around the development of SMRs and advanced reactors. Indiana built on existing policies in 2023, enacting an amendment to existing statute that raised the defined capacity of an SMR from 300 megawatts (MW) to 470 MW. Oklahoma considered, but did not pass, legislation that would have required the state to adopt its own rules related to advanced nuclear.  

However, perhaps the most common nuclear-related legislation in 2023 involved studies and working groups to tackle various nuclear issues. At least 10 states passed more than a dozen measures to examine state policy options to support new nuclear development, identify regulatory barriers, workforce challenges or educational programs. These varied from California’s AB 1172 to commission a study on the potential and outlook for nuclear fusion to the development of the Kentucky Nuclear Energy Development Working GroupVirginia and West Virginia each established nuclear education and collaboration initiatives through the university systems, while the Texas legislature approved the development of a working group to study the benefits of coal-to-nuclear conversions—though the governor vetoed the measure. 

Two failed measures out of Virginia and West Virginia that would have established SMR pilot programs are also worth noting. West Virginia HB 3434 would have established a state SMR pilot program to support new development and set a goal of developing four SMRs, with the first by 2032. Virginia HB 2333 passed both chambers but failed in concurrence. The legislation would have also established an SMR pilot program, limited to three SMRs, with the goal of having the first reactor online by 2032. 

Finally, Arkansas acted on spent nuclear fuel in a unique way. While several states have codified their opposition to storing spent nuclear fuel, Arkansas HB 1142 authorized the state Division of Environmental Quality to explore the potential for establishing a spent nuclear fuel recycling and interim storage program in the state.  

Transportation Electrification Trends

EV Charging Reliability and Public Accessibility 

Many states worked on legislation in 2023 to help deploy more accessible and reliable EV chargers for the growing EV market and to open up opportunities for more people to own EVs, including renters and middle and lower-income households. 

A common theme in 2023, continued from 2022, was instituting requirements for EV charger installation in new construction, or in some case major renovations, of commercial or residential properties. At least seven states enacted or considered new legislative requirements for such installations: Colorado (HB 1233), Delaware (SB 103), Hawaii (HB 346), Illinois (SB 40), Maryland (HB 830), North Carolina (HB 318), and New York (SB 1736 and SB 6301/1535). Some states, like Maryland (HB 834) and Pennsylvania (SB 157), also provided new or expanded tax credits and funding to help install EV charging stations in 2023, or have created other regulatory measures to ease the installation of EV chargers for those that don’t have a garage or private driveway, such as Maryland HB 101.  

Also, an emerging trend in 2023 revolves around charging reliability, as states with expanding EVSE networks also work to make sure the state and its utilities are planning for transportation electrification, with a few states having pushed utilities and PUCs to ensure that the electric grid and distribution system can reliably accommodate the electric load from new EV infrastructure. Examples include state legislatures incorporating EVs into their energy, transportation and utility planning, or helping support charging stations alongside distributed energy resources or backup power to help ensure consistent energy supply to EV chargers (New York SB 489, District of Columbia B25-0106, New Hampshire SB 52). Further, more states have begun enacting laws aimed at ensuring EV chargers are working consistently (New York AB 1721, Maryland HB 834) and are compatible with as many vehicles as possible (California AB 591, New York SB 487, Texas SB 1732).  

Transitioning Passenger Vehicles, Heavy Duty and Transit Vehicles, and State Fleets 

Twelve states have now adopted California’s Advanced Clean Cars 2 (ACC2) rule (California, Oregon, Washington, New York, Massachusetts, Vermont, Virginia, Colorado, Maryland, Delaware, New Mexico and New Jersey in order of adoption), which aims to increase EV sales to 100% of all vehicle sales by 2035. Delaware, New Jersey, and New Mexico all adopted in 2023, while a few other states including Maine, Rhode Island, and Washington, D.C. are in the process of adoption. Notably, Delaware and New Mexico only adopted the ACC2 rule up through the 2032 target of 82% EV sales, not the full 100% target by 2035. Colorado, similarly, only adopted the regulations through 2032, leaving the option to go a different direction afterwardConnecticut’s executive branch, meanwhile, withdrew a pending regulation adopting the rule in 2023 citing lack of legislative support. Continuing a trend from previous years, additional states have moved to require that state-owned vehicles, both light duty and heavy duty, be EVs or zero-emission vehicles, typically by a certain date as with Delaware HB 9. Newly enacted requirements were less common in 2023 than in 2022, however, while many states pursuing this goal acting through the executive branch under authorities already provided in statute. 

Regarding the heavy duty sector, Colorado, Maryland (via SB 224), and New Mexico adopted California’s Advanced Clean Trucks (ACT) Rule in 2023, bringing the total adoptees to nine including California. The rule requires vehicle manufacturers to increase their sales percentage of zero-emission trucks, reaching 75% for medium-duty trucks, 55% for pickup trucks and vans, and 40% for heavy-duty (class 7 and 8) trucks by 2035. Connecticut, Maine, and Rhode Island are in the process of adopting the rule and could do so in 2024.  

Other states, including Washington and some of the other ACT Rule adoptees, considered or enacted bills in 2023 that specifically require newly state-purchased or contracted buses—such as school and transit bus fleets—to be electric or other zero-emission technology, often with a deadline starting in 2035. Some examples include California (AB 579), Hawaii (SB 970/SB 457, pending), Massachusetts (SB 2218), along with pending bills in Illinois (SB 2154) and Minnesota (HB 413) that were introduced in 2023 but that could be acted on in 2024. As more states look to target heavy duty vehicle emissions and encourage heavy duty fleet electrifications, several legislatures including those in Michigan, Minnesota, and Washington also included funding in their state budgets for programs to help deploy zero-emission heavy duty vehicles and EV school buses. In at least one case, new requirements for EV charging installations are designed in a way to help power state-owned or heavy duty fleet vehicles, such as in New York with SB 6301

Coal, Oil and Gas Trends

Fossil Fuel Landscape 

As the U.S. continues to work toward reducing emissions and transitioning to cleaner and renewable sources of energy, the fossil fuel landscape continues to change. At the federal level, policies aimed to decrease fossil fuel emissions and prioritize public health continue to impact the industry. For example, the IIJA offers funding for carbon capture and utilization as well as orphaned and abandoned well remediation. These programs aim to reduce greenhouse gases, like methane, from entering the atmosphere as a result of fossil fuel production. While renewables are a large focus, policymakers are conscious of the role oil, gas, and coal still play in meeting the energy demand and remaining economically stable. Many states continue to rely heavily on petroleum and natural gas, even when making efforts to increase renewable generation through emissions and renewable generation targets, fossil fuel plant decommissioning, and clean energy incentives. 

Natural Gas 

One popular fossil fuel topic this year was natural gas. Natural gas has a role in replacing coal, is a major U.S. export, and about 60% of U.S. homes use natural gas. While natural gas does emit less greenhouse gases when burned, it does contribute to emissions during its lifecycle and natural gas production is an area of concern for states focusing on renewable energy and emissions goals. 

A headline-making natural gas story this year came from New York's bill S4006c. The bill bans natural gas in new construction, starting in 2026 and 2029 as determined by building size. Exemptions are made for critical infrastructure, like hospitals. Residential and commercial buildings, however, will be required to use electric appliances. The bill does not apply to consumers with existing appliances, like gas stoves. While New York is the first state to ban natural gas, local governments in the U.S. have also started banning gas appliances. New York’s ban comes as many states have been taking the opposite action, prohibiting natural gas bans, a trend that began in 2022 and has continued through 2023.  

This year, at least 10 states introduced legislation prohibiting local governments from placing bans on natural gas hookups, which has been contentious in some states as cities are implementing electric-only appliance hookups. This includes Michigan HB 4575, North Dakota HB 1234, Idaho HB 106, South Dakota SB 174, Montana SB 208, North Carolina HB 130, Pennsylvania SB 143, Wisconsin SB 49, Maine LD 894 and Virginia HB 1783. This legislation passed in all listed states except for Michigan and Maine.  

Severance Taxes 

Severance taxes are fees imposed on fossil fuel industry operators for the resources they extract and then sell or use out of state. The revenue from these taxes can then be used by the state or to reimburse communities affected by operators. Currently, 34 states impose some type of severance tax. In 2023, multiple states explored severance tax changes and exemptions for certain operators, including Alaska, Louisiana, Mississippi, Montana, North Dakota, Pennsylvania, Texas, Utah, West Virginia, and Wyoming. States may use severance taxes, or exemptions, to incentivize certain types of oil production and attract operators to their state. States are also conscious of the revenue a severance tax may bring to their state.  

Texas legislation introduced HB 2056 and HB 591. HB 591 passed and was signed into law. The bill exempts severance taxes for wells where the produced gas is consumed within 1,000 feet of the well when this gas would have otherwise been lawfully vented. The bill requires operators to apply annually for the tax exemption and must receive a certificate issued by the state to qualify for the exemption.  

Mississippi and Louisiana also approved exemptions and temporary changes to severance taxes in their state to incentivize production. Mississippi HB 383 approved an extension to temporarily reduce severance tax rates for horizontally drilled wells. The temporary rate of 1.3% is applied, as opposed to the state’s rate of 6%. Louisiana’s enacted HB 634 offers an exemption for deep-well oil and gas production. The bill specifies an exemption from severance taxes for any natural gas, gas condensate or oil well drilled with a depth over 15,000 feet. Louisiana also has exemptions for horizontal wells and orphan well rework.  

Lastly, Pennsylvania House Resolution 131 directs the state’s Legislative Budget and Finance Committee to study and compare impact fees and severance taxes across the largest natural gas producers in the U.S. and assess the competitive business climate of the natural gas industry in those states. The state does not currently impose a severance tax fee, despite being a major natural gas producer in the country. 

Conclusion and Looking Ahead

State legislatures addressed numerous energy policy priorities in 2023, with over 560 bills enacted. These actions consisted of policies to reduce greenhouse gas emissions and support clean energy development, improve energy efficiency, further develop alternate fueling infrastructure and tackle building electrification efforts, and improve the security and resilience of energy systems in the face of evolving challenges and risks. 

From supporting new energy development to protecting existing energy sources, to implementing the IIJA and modernizing energy systems, state lawmakers play an important role in shaping the future of the U.S. energy sector. This white paper highlighted the many policies that state legislatures proposed in the past year and how these policies may influence the future of America’s energy system. While it is not yet known what policy priorities will dominate the 2024 legislative sessions, state legislators are introducing a wide range of measures that impact the energy sector, which NCSL will continue to track through the State Energy Legislation Database

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