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Equity and energy justice issues—especially for low-income and disadvantaged communities—are being increasingly considered by policymakers as part of the clean energy transition.
The issue is whether and how people from low-income or disadvantaged communities, particularly people of color, can be disproportionally impacted by the negative effects of the energy transition and also fail to realize benefits from that transition.
Among the tools, state legislatures use to advance the energy transition is the adoption of renewable portfolio standards (RPS) or clean energy standards (CES). While the impacts of energy transition can be far-reaching, people from disadvantaged communities typically experience more severe negative impacts from energy transition in the form of the increased cost of energy, workforce disruption, and environmental quality.
Equity and energy justice provisions in state RPS/CES policies have become more commonplace as states promote a transition to clean energy while attempting to address the negative impacts created by the transition. Some states are passing new legislation or amending existing legislation that address issues affecting low-income and disadvantaged communities. For example, Maryland launched two new programs in September 2021 aimed at providing access to clean energy and reducing energy costs for low- and moderate-income residents.
Since the nature of RPS/CES is to regulate utilities, most of the equity provisions found during our research address the increased financial burdens experienced by low-income communities during energy transitions. However, states have also passed companion legislation that establishes programs to address other equity issues. The Clean Energy States Alliance has published a directory of state energy programs and initiatives specifically designed for low- and moderate-income residents. Although the directory is a few years old (2018), it is comprehensive and provides a great overview of relevant state programs, some of which will be discussed in detail below.
Below is an overview of recent state RPS/CES legislation and how these states address equity issues in their energy mandates. The overview is limited to recent state legislation on the topic, only focusing on states that have updated their RPS/CES requirements since 2018. Where relevant, an overview of programs related to clean energy standards that address equity issues is included. In addition, NCSL maintains a webpage of state RPS/CES policies.
State Overview
California
California’s Public Utilities Code establishes the state’s Renewables Portfolio Standard Program. The purpose of the RPS program is to supply electricity from renewable energy generated sources in order “to improve California’s air quality and public health, particularly in disadvantaged communities… [and] ensure rates are just and reasonable, and are not significantly affected by the procurement requirements of this article.” Despite the overarching policy goals, this is the only mention of equity concepts in California’s RPS statute.
However, numerous programs affiliated with California’s RPS program are intended to ensure the energy transition benefits low-income and disadvantaged residents of the state. California offers multiple programs—the California Alternate Rates for Energy and the Family Electric Rate Assistance—aimed at providing direct rate-paying assistance to people in disadvantaged communities. Additionally, the CalEnviroScreen assessment program identifies and monitors communities that are at the highest risk of environmental harm and attempts to address these environmental issues through community investment.
In addition, California’s cap and trade program raise revenue for community investments and funds projects through the California Climate Investment (CCI) program. Projects funded by CCI include affordable housing projects, environmental restoration projects, and public transportation projects. One particularly successful CCI program is the Solar on Multifamily Affordable Housing initiative, which provides for the funding and installation of community solar projects on multifamily housing in disadvantaged communities.
Colorado
Colorado’s renewable energy standard was updated in 2019. Along with increased renewable energy requirements, a few provisions regarding equity were also included in the updates. For example, Colorado’s RPS encourages utilities to offer rebates or other incentives for distributed generation in low-income communities. Similarly, it promotes “community-based projects” for small-scale community-based renewable energy projects.
Utilities also must adopt a “clean energy plan” aimed at reducing the utility’s emissions and developing clean energy resources for generating electricity. As part of that plan, utilities must identify any existing generating facilities that will be closed and provide “workforce transition and community assistance plans” for utility workers that will be displaced by the transition to clean energy.
Most notably, Colorado’s RPS legislation attempts to “address historical equity issues concerning access by low-income customers to renewable energy” by prioritizing investment and direct benefits for disproportionally impacted communities. The RPS statute directs “not less than 40%” of expenditures by utilities that are related to the clean energy transition be directed towards programs, incentives, and investments that benefit low-income customers and disproportionally impacted communities.
Connecticut
Connecticut’s RPS statute mandates renewable energy requirements for suppliers and utilities but does not explicitly mention any equity concepts. However, the accompanying statutes within the utility regulating statutes do attempt to address some issues that “vulnerable communities” face during the energy transition. The state promotes shared renewable energy facilities and mandates that at least 10% of the total generating capacity of the shared renewable energy facility be sold to low-income customers. The state will also provide funding for shared renewable projects with preferences given to projects that serve or benefit customers who reside in “vulnerable communities” or “environmental justice communities.”
Massachusetts
Massachusetts’ Renewable Portfolio Standard focuses solely on regulating utilities in the state, but the state does have a few programs that address issues of equity and environmental justice. Massachusetts’ Green Communities Designation and Grant Program is designed to allow cities and towns within the state to receive funding for energy efficiency and renewable energy projects within their communities.
The grant program addresses numerous equity and energy justice issues, such as reducing energy costs, reducing pollution, facilitating the development of renewable energy resources, and creating local jobs in the renewable energy sector. Most cities and towns in the state have received a “green community” designation and a majority of those designated are considered “environmental justice communities” by the state. The program has been successful at providing funding for projects located within and directly benefit those communities.
Another community-based program playing a large role in Massachusetts’ equitable clean energy transition is the Solar Massachusetts Renewable Target (SMART) program. The SMART program incentivizes utilities to develop solar energy generating resources in the state in exchange for credits linked with the state’s RPS program. The program provides additional incentives and credits for solar facilities that serve low-income customers, are located within low-income communities, or are community solar facilities.
New York
New York’s Renewable Portfolio Standard was revamped by SB 6599 in 2019. The new legislation, titled the Climate Leadership and Community Protection Act, dedicated much of its focus on ensuring that the state’s transition to clean energy was equitable and beneficial to disadvantaged communities. The act established the Climate Action Council (CAC) which determines how the provisions of the act are implemented and is comprised of community representatives and energy justice advocates.
The CAC considers the impacts the energy transition has on disadvantaged communities and is intended to ensure disadvantaged communities are not bearing the cost of the energy transition. Some of the provisions established by the program include workforce transition and job training, reduction of greenhouse gases and other pollutants in disadvantaged communities, investment in energy storage and distributed energy projects, and other public health, environmental, and economic benefits for those communities.
New York’s RPS also directs disadvantaged communities receive “40% of overall benefits of spending on clean energy and energy efficiency programs, projects or investments in the areas of housing, workforce development, pollution reduction, low-income energy assistance, [and] energy, transportation, and economic development.”
Oregon
Oregon adopted HB 2021, its “Clean Energy Targets” legislation, in July 2021. The legislation represents one of the most aggressive clean energy transition timelines in the county and contains numerous provisions regarding equity. For instance, the statute mandates the implementation of the CES requirement “be done in a manner that minimizes burdens for environmental justice communities.” Utilities regulated by the Clean Energy Targets legislation must convene a “Community Benefits and Impacts Advisory Group” that includes representatives from environmental justice communities and low-income ratepayers and is tasked with assessing the community benefits and impacts of the utility’s clean energy plan.
Oregon seeks to accomplish its aggressive clean energy goals by relying in part on “community renewable energy projects.” These projects are funded through the Community Renewable Investment Program and seek to provide “direct benefits to communities across this state in the form of increased community energy resilience, local jobs, economic development or direct energy costs savings.” To receive a grant under this program, applicants must “incorporate equity metrics … for evaluating the involvement of and leadership by people of low income, Black, Indigenous or people of color, members of tribal communities, people with disabilities, youth, people from rural communities and people from otherwise disadvantaged communities in the siting, planning, designing or evaluating of the proposed community renewable energy project.”
Virginia
Virginia amended its Renewable Portfolio Standard in 2020 through SB 851. The bill contains multiple considerations for low-income and disadvantaged communities. For instance, every three years, Virginia’s Department of Mines, Minerals, and Energy and the state’s Council on Environmental Justice shall assess the impacts of implementing the act on historically and economically disadvantaged communities.
The new RPS policy also requires that at least 15% of the proposed costs of energy efficiency programs developed by utilities be allocated to programs designed to benefit low-income, elderly, disabled individuals, or veterans. Additionally, when a utility proposes the construction of a new energy generation facility, it must assess, and Virginia’s State Corporation Commission must consider, the “social cost of carbon…and ensure that the development of new…energy resources or facilities does not have a disproportionate adverse impact on historically economically disadvantaged communities.”
Virginia’s RPS penalizes utilities that do not meet the established RPS requirements in any given year by charging them a “deficiency payment.” Money collected by these deficiency payments is then distributed by the state as determined by the statute. Fifty percent of the revenue is directed to “job training programs in historically economically disadvantaged communities” and an additional 30% of the collected revenue is directed to “renewable energy programs located in historically economically disadvantaged communities.”