Under the radar: Innovative state policies for a cleaner economy
While the federal budget and regulatory actions have captured headlines this year, U.S. states continue to take important legislative and executive actions to deploy clean technologies that generate local investment, create jobs, and reduce emissions. Some recent state actions are notable for their policy innovations that tackle challenges involving transmission buildout, low-emission industry, transportation emissions, renewable energy siting, and clean firm technologies such as fusion and next-generation geothermal energy.
Here are just a few of the innovative state policies and bills (some passed, others didn’t) that are replicable in other states.
Texas nuclear energy fund
Texas recently enacted HB 14, establishing the Texas Advanced Nuclear Energy Office within the Office of the Governor and creating the Texas Advanced Nuclear Deployment Fund, supported by an initial $350 million legislative appropriation. The office will lead statewide efforts to plan, coordinate, and promote the development of advanced nuclear energy and will include a nuclear permitting coordinator to help developers navigate regulatory processes. The fund will provide reimbursement-based grants to support early project development and construction expenses. HB 14 marks a strong first step toward positioning Texas as a national leader in advanced nuclear energy, but sustained state investment and additional policy support will be essential to realizing its full potential. Learn more about the bill and CATF’s view of nuclear energy opportunities in Texas with this op-ed in the Texas Insider.
California’s public finance and ownership structure for transmission
Multiple bills in the California State Legislature address alternative financing and ownership for transmission lines. California Assembly Bill 825 is a package of electricity affordability legislation that would, among other things, create a public transmission program to utilize public funding to lower the cost of future transmission projects, a model that can be used in states beyond California. The program would support public-private partnerships for transmission projects developed by investor-owned utilities (IOUs), and the state’s role as a public partner would allow portions of these projects to be publicly financed, while passing the savings on to ratepayers. Other bills include the package of electricity affordability legislation in California Senate Bill 254, which would establish a Clean Energy Infrastructure Authority to implement the approach, and SB 330, which would authorize the governor to establish one or more transmission infrastructure pilot projects that would achieve ratepayer savings.
During development of the bills, CATF experts presented research on public financing for transmission infrastructure to key committees. This analysis, developed by CATF and Net-Zero California (NZC), found public-private financing for transmission infrastructure could save Californians $3 billion per year – about $123 billion over 40 years. CATF’s analysis explored and evaluated four alternative models for financing and developing transmission infrastructure in California: IOU financing and development, wholly public, public-private partnership (concession), and public-private partnership (lease). Resources from CATF’s and NZC’s Wired for Savings research and policy proposals on the topic can be found here.
New Mexico’s tax credits for industrial decarbonization
New Mexico HB 538 would have established a production and investment tax credit for industrial decarbonization projects in the state. The bill sought to attract new investment and projects that reduce emissions from the state’s industrial sector by providing a production tax credit per ton of CO2 reduced below an industrial benchmark and an investment tax credit for eligible facilities. Eligible products included concrete, cement, asphalt, iron, steel, glass, hydrogen, critical minerals, or refinement process products. In the context of changing federal incentives, this bill aimed to help stabilize the policy environment to attract climate-forward investment across the state.
Massachusetts’ comprehensive reforms to clean energy infrastructure siting and permitting
In November 2024, Mass. Governor Healey signed a comprehensive climate and clean energy bill into law (2024 Climate Act) that contains significant reforms of the state’s siting and permitting processes for clean energy infrastructure. The reforms, based on recommendations presented by the Governor’s Commission on Energy Infrastructure Siting and Permitting, streamline permitting by (1) establishing a 12-month deadline for municipal permitting, requiring municipalities to issue a single permit at the end of the process and (2) requiring that state permits be issued together by the Energy Facilities Siting Board (EFSB) after a 15-month period. Further, the law improves equitable siting and community engagement processes by granting municipalities automatic intervenor status in EFSB proceedings and establishing a fund to support stakeholders with legal representation and expert analysis needs.
Additional states to recently tackle energy siting practices include Pennsylvania (bill introduced), New York (law enacted last year), and Colorado (law passed). Updated renewable energy siting policies address barriers to clean energy infrastructure deployment, enabling faster, smoother clean energy buildout. By proactively tackling challenges—like permitting and community concerns—comprehensive, forward-looking siting policies can support timely renewable energy deployment.
Virginia leading on commercial fusion energy
The Governor of Virginia signed into law HB 1779/SB 1338, which adds fusion energy to the list of generation sources that qualify as carbon-free energy or clean energy. This is a significant step forward for the role of fusion energy in Virginia, as it acknowledges its role as a zero emission, clean firm resource. This bill sets the stage for further legislative action to grow the state’s clean firm resources and is an example of an action states can take to advance fusion energy. In addition to Virginia, Washington, New Jersey, Massachusetts, California, and Wisconsin have passed or introduced fusion legislation. View this FAQ to learn more about fusion energy.
Colorado empowers geothermal energy development
Colorado’s HB25-1165 modernized the state’s regulatory structure around geothermal resources. The bill streamlines regulatory approval for next-generation geothermal technology by clarifying regulatory authority over different types of geothermal operations and eliminating unnecessary permitting steps for superhot dry rock wells below 2,500 feet. By making key technical fixes, such as removing overlapping permitting requirements for deep and dry (non-tributary groundwater) wells between the State Engineer and the Energy and Carbon Management Commission and creating new notice requirements for protecting existing geothermal operations, this law will help unlock next-generation geothermal energy development across the state.
Superhot rock geothermal has significant potential to meet long-term demands for zero-carbon, always-on power. Learn more about how this innovative energy source can unlock terawatts of clean, firm power across the globe through CATF’s first-of-its-kind modeling tool and other CATF resources.
California’s indirect source review program
California’s AB 914 aimed to affirm the California Air Resources Board’s authority to promulgate Indirect Source Review (ISR) rules. While air districts in the state have successfully implemented regional ISR rules, this bill intended to clarify a pathway for state-wide regulation of pollution from major transportation hubs, driving down harmful air pollution and advancing clean energy technology development.
Under the Clean Air Act, states have the authority to regulate emissions from a building or other stationary facility that attracts mobile sources of pollution. This is a powerful tool states (and other jurisdictions) can use to regulate mobile sources of pollution indirectly, without relying on a federal waiver.
These recent policy innovations demonstrate the ongoing opportunity for states to craft new policies that meet their particular goals and to learn from other states as they develop new policies.
