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With Most State Capitols Closed, Some States Press Forward on Clean Energy Legislation

While the COVID-19 pandemic continues to keep most of America home, including state legislators, some states have managed to pass landmark clean energy legislation whilst prioritizing matters related to the novel coronavirus.

In New York, the state with the most confirmed coronavirus cases to date, state legislators recently passed The Accelerated Renewable Energy Growth and Community Benefit Act as part of the FY 2020-2021 state budget on April 3. The Act, which focuses largely on siting changes, will create the Office of Renewable Energy Siting to create a streamlined process for siting of large-scale renewable energy projects across the state. While the state’s existing energy generation siting process was designed for siting fossil-fuel e energy generating plants, the new process establishes uniform environmental standards and aims to expedite project development for renewable energy projects. The Act also includes provisions ensuring that renewable energy development is targeted to maximize economic development and environmental protection, directing the benefits of renewable energy projects to the local host community, and helping to prioritize the planning, investments and responsible development of grid infrastructure.

The provisions contained in the Act will move New York towards its clean energy and climate goals, including the current mandate to obtain 70% of the state’s electricity from renewable sources. In addition to combatting climate change, the Act will help New York to speed economic recovery from the COVID-19 crisis.

The Virginia state government took similar action when, on April 12, Governor Ralph Northam signed into law the Virginia Clean Economy Act. The Act requires the state to transition to 100 percent carbon-free or renewable energy by 2050, making Virginia the eighth state to set such a mandate and the first state in the southern United States to do so. Provisions included in the Act include a moratorium on new fossil fuel plants until 2022, requirements that utilities meet targets for helping customers to use less energy by 2025, and new parameters for the expansion of renewable power, which require that Virginia develop 5,200 megawatts of offshore wind power by 2034. Energy companies that do not meet the new targets will be fined, with portions of that revenue going towards job training and renewable energy programs in low-income and otherwise disadvantaged communities.

On the same day, Governor Northam also enacted an amended version of the Clean Energy and Community Food Preparedness Act, which now requires the state to join the Regional Greenhouse Gas Initiative. That initiative, known as the RGGI, is a cooperative effort among states to cap and reduce carbon dioxide emissions from the power sector. As a member of the initiative, Virginia will establish an auction program to sell allowances into the market-based program.

However, despite these promising developments, the closure of statehouses around the country, and the postponement of legislative sessions in over half of states, has led to the inevitable slowdown of renewable energy legislation, stalling many reforms in the clean energy space indefinitely.

In Illinois, similar legislation to that passed in Virginia that would bring Illinois up to 100 percent renewable energy by 2050 has been put on ice since the state government in Springfield was closed down in early March. The Clean Energy and Jobs Act, which would add a monthly renewable energy charge to residents’ energy bills, establish opportunities for clean energy job training, and provide incentives for small businesses, would have a complicated route to passage in any environment due to its complexity and the number of stakeholders involved. Now, however, the state’s first priority is enacting legislation concerning the COVID-19 crisis, making it even less likely that the bill will be passed for at least the next several months.

Interruptions and deferrals of state legislative sessions has affected a number of other state-level clean energy initiatives. In Minnesota, the capitol’s closure has stalled efforts to find consensus around a clean energy bill that would prioritize carbon-free energy over fossil fuels and strengthen the state’s energy efficiency standard. In Michigan, a statutory cap on distributed generation for rooftop solar installers is scheduled to expire in the coming weeks. Because states are currently focused on legislation critical to the management of the COVID-19 pandemic, it appears that clean energy initiatives will be placed, at least for the foreseeable future, on the back burner.

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Sahir Surmeli

Member / Co-chair, Energy & Sustainability Practice

Sahir Surmeli is a Mintz business counselor who advises companies, boards, entrepreneurs, investment banks, and venture and private equity investors as they build and grow companies. He handles public offerings, 144A and private financings, acquisitions, joint ventures, and strategic partnerships.

Thomas R. Burton, III

Member / Chair, Energy & Sustainability Practice

Tom Burton has helped to shape the clean energy industry by drawing on his passion for innovation. As a Mintz attorney, Tom counsels investors, entrepreneurs, and Fortune 100 companies. He also guides start-up organizations and accelerators to foster the next generation of energy leaders.