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State clean electricity standards spur clean technology investments and reduce emissions 

January 23, 2025

State-level action has played a crucial role in the development of the nation’s clean energy economy, and states show no signs of slowing down. One way states are leading is by enacting technology-neutral clean electricity standards (CES). These policies advance a variety of goals, including reducing emissions, improving air quality, advancing a clean technology economy, leveraging clean energy funding and financing, and responding to consumers and businesses who want reliable and clean energy. States are enacting CES policies, in part, because they can be tailored to meet each state’s needs while deploying cleaner and more diverse sources of electricity.   

A CES builds on existing state and federal clean energy policies, including renewable portfolio standards, cap-and-invest, and Clean Air Act regulations, by establishing ambitious requirements for the electric power sector to provide clean electricity to customers while generating both economic and environmental benefits. In addition, federal funding opportunities through the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) can help states support deployment of a wide array of clean electricity resources. These funding streams provide opportunities to accelerate adoption and implementation of state clean electricity standards across the U.S.  

CATF has developed in-depth resources to help states and other stakeholders understand how a CES can help achieve their clean energy goals. The first is a report outlining how the policy functions, key design elements, and potential benefits of implementing a CES. The second is an interactive map that allows users to explore how each state has customized its CES according to the needs of the individual state.  

What is a CES and what benefits can it deliver? 

Historically, state policies prioritized renewable energy targets through “renewable portfolio standards” (RPS), which typically focus exclusively on renewable energy resources, specifically requiring electric retail suppliers to deploy more wind, solar, and other renewables. Now, states are building on those policies by adopting technology-inclusive clean electricity standards that unlock a fuller suite of technologies, including nuclear, clean hydrogen, and fossil with carbon capture, to help drive clean energy investment. A state CES provides the framework for utilities and other power providers to make long-term investment and resource planning decisions while reducing air pollution and creating jobs. Around a dozen states have enacted CESs designed to reduce emissions and ensure that electricity remains reliable and affordable. 

There are a variety of ways to design a state CES, with the common underlying principle that an increasing share of electricity must come from sources with zero or near-zero carbon emissions. An effective CES includes three key features: 1) the CES sets an enforceable requirement to transition to clean electricity; 2) the policy includes a broad range of clean electricity technologies, not exclusively renewable energy; and 3) the CES establishes ambitious targets, either for clean electricity or carbon emission reductions.  

By enabling a diverse set of clean energy resources, states have the flexibility to achieve their clean energy objectives according to their own distinct resources, market conditions, and political considerations. 

States that adopt a CES can expect an array of benefits. 

  1. Certainty for Investments: CESs guide long-term resource planning and investment decisions, encouraging greater investments in clean electricity resources.  
  1. Consumer Savings: CESs can reduce consumers’ exposure to fossil fuel price volatility, lower operating costs, and attract federal funding that mitigates ratepayer costs.  
  1. Economic Growth: CESs can attract investment in clean energy projects, create associated jobs, and increase the flow of federal funding to the state.  
  1. Health and Environmental Improvements: CESs can significantly improve air quality and public health, including for communities disproportionately affected by air pollution.  
  1. Access to Federal Funding: CESs align with considerable sources of federal funding, enabling states to maximize funding and reduce the cost of pursuing a CES.  

Key policy design considerations for a CES 

While differences in market structure, existing generation, and natural suitability for certain clean energy resources will yield variation in individual state CES policies, lawmakers can consider common design elements when crafting a CES.  

  1. Form of the Standard: A CES can be based on the amount of clean electricity provided to customers or stated as a percentage reduction in greenhouse gas emissions.  
  1. Eligible Clean Electricity Sources: Allowing all clean electricity sources, not just renewables, to contribute to achieving the standard furthers reliability and affordability, and leaves room for new technologies to contribute once they reach commercial availability.  
  1. Stringency: Policymakers must determine the stringency and timing of the standard, balancing current opportunities with future technological advancements.  
  1. Point of Regulation: The entity with the compliance obligation is determined by the point of regulation. In vertically integrated states, for example, the utility has the obligation to meet CES requirements.  
  1. Compliance: Typically, the state public utilities commission or the state environmental regulator is responsible for ensuring compliance and enforcement.  
  1. Tracking: A robust system to track the generation and consumption of clean electricity or the required emission reductions facilitates compliance and ensures program integrity, though not all states currently use one.  
  1. Requirements for In-State Generation: Policymakers must weigh local economic benefits, job creation, legal limitations, and regulatory authorities while ensuring the free flow of power across an interconnected grid when determining whether to favor in-state generation.  
  1. Flexibility for Different Types of Providers: Tailoring the stringency and/or timing of the standards for different types of power providers (e.g., electric cooperatives and investor-owned utilities) may result in greater support while encouraging these entities to take advantage of federal incentives.  
  1. Cost Containment and Compliance Flexibility: A technology-neutral CES provides multiple pathways for compliance. Provisions for cost and reliability off-ramps help guard against unintended consequences while ensuring utilities and others deploy new clean sources.   
  1. Aligned Renewable Energy Standards: A CES can integrate a new or existing Renewable Portfolio Standard or operate in parallel to an RPS to help advance a state’s clean and renewable electricity objectives.    
  1. Carveouts and Other Incentives: Carveouts and incentives may be included in a CES to boost deployment of resources—such as distributed generation, battery storage, offshore wind, hydrogen, or geothermal—but they bring tradeoffs.  
  1. Advanced Design Features: Advanced CES design features, such as a clean capacity standard or hourly retail sales requirement, incentivize deployment of clean firm and long-duration storage technologies sooner than a typical CES and accelerate emissions reductions.    

CATF’s interactive map allows users to see which states have adopted a CES or an RPS, explore the policy design elements each state has selected, and compare various states’ standards. Searchable design elements within the map include, among others, stringency of the standard, form of the standard, point of regulation, eligible technologies, and compliance tracking. The map provides a dynamic and visual tool to evaluate CES policies and determine which ones might be best for a specific state. 

There is public support for clean energy, and states are in the driver’s seat. Implementing a clean energy standard makes sense from economic, health, and environmental standpoints, while providing needed flexibility for each state and the private sector to determine what works best within their jurisdictions. There are well-trodden paths of adopting and implementing CES policies, and CATF resources can help states identify the specific policy design elements, timelines, and paths that work best for them. 

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