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On the third anniversary of the signing of the Inflation Reduction Act, Heatmap contributor Advait Arun mourns what’s been lost — but more importantly, charts a path toward what comes next.
Today, the Inflation Reduction Act would have turned three years old — if it hadn’t been buried alive in a big, beautiful grave. While the IRA was a hodgepodge of programs salvaged from President Biden’s far more ambitious Build Back Better agenda, it still represented the biggest climate investment in U.S. history. It catalyzed over $360 billion in energy and manufacturing investments and was expected to drive the installation of over 155 gigawatts of new solar and wind energy by 2030. And now Republicans have taken a sledgehammer to its achievements.
The timing could not be worse — not just for the climate, but also for the energy systems that we rely on. At a moment when the energy sector requires $1.4 trillion worth of upgrades by 2030 just to keep up with rising energy demand and increasingly erratic weather, Republicans have instead delivered a one-two punch of tariffs and tax hikes, sabotaging the industrial base required to deliver those investments and raising the retirement age of our power generation fleet.
All over the country (Texas and California maybe exempted), our aging electricity system is putting in its two-weeks notice. Staring down the barrel of precipitous demand growth, the country’s regulated utilities have requested over $29 billion in rate increases, concentrated across the West and South. The Department of Energy ordered the delayed retirement of coal plants and oil generators to manage this summer’s demand peaks. Meanwhile, capacity market prices on two of the country’s largest grids, PJM and MISO, have reached record highs ― a cry for new supply that is now increasingly unlikely to materialize quickly or cheaply. Two months ago, an unplanned nuclear reactor outage on a congested part of Louisiana’s energy grid led to a blackout for 100,000 people in and around New Orleans. That meant no working AC or refrigerators across large swaths of the city during a sweltering Memorial Day weekend.
All of this amounts to an opening for Democrats to shift public opinion decisively in favor of renewed climate action. Moving forward, lawmakers cannot ignore our infirm fossil-fired energy system, which stands to thwart their ability to deliver affordability, employment, health, and resilience to their constituents. Despite our recent losses, we still need an energy policy ― a climate policy.
What should the Democrats’ second attempt at a clean investment program look like? Having delivered the Bipartisan Infrastructure Law and the Inflation Reduction Act, laws that committed the state to the realization of a particular energy future, Democrats are well-positioned to build on their successes, and even to engage Republicans who remain interested in supporting innovative technologies, decarbonizing industry, and protecting public lands.
Where they cannot meet Republicans halfway, Democrats should double their ambitions. They must continue to embrace the power of federal investment to shape markets and achieve policy goals. But they must also learn from the shortcomings of their previous legislative outings and substantively change how the federal government invests in the first place. The way forward for Democrats starts with mapping out exactly how far they didn’t go, and ends with going there.
IRA and BIL were paradigm-shifting attempts at market-shaping. They laid the groundwork for the deployment of promising clean firm energy technologies such as next-generation geothermal and nuclear energy, as well as for necessary grid and supply chain upgrades, such as long-distance transmission corridors and critical minerals processing.
IRA and BIL were not, however, a comprehensive climate policy. They created cost-share programs for infrastructure resilience but neglected to buttress municipal bond markets, which states and local governments can use to make longer-term investments in climate resilience and adaptation. They penalized methane emissions but organized no comprehensive or compulsory managed phaseout of fossil fuel infrastructure. They failed to advance or adequately finance a coordinated deployment strategy for any key energy sector. And they shed the transformative vision of Biden’s Build Back Better agenda, which sought to stabilize the cost of living for Americans in the meantime — a tactical retreat that, in retrospect, looks ill-advised given voters’ current worries about affordability.
I am aware that criticizing BIL and IRA on these grounds amounts to judging them for goals they didn’t attempt to achieve. Judging them by the goals they did attempt to achieve, however, reveals that they only ever worked incompletely. Taken together, BIL and IRA expanded the energy tax credit system, created powerful programs for piloting and deploying innovative energy technologies, and seeded an ecosystem of regional financing institutions devoted to more equitably distributing the benefits of decarbonization. But the energy tax credits were never expansive enough; the programs intended to motivate investments into deeper decarbonization were not flexible enough to drive the mass uptake of emerging technologies; and efforts to decarbonize disadvantaged communities lacked a coherent strategy and ran headlong into local capacity constraints.
Speeding up the energy transition and building new infrastructure at scale requires endowing federal and state agencies with adequate appropriations, access to liquidity, and crystal-clear, wide-ranging mandates, as well as empowering them in statute with considerable flexibility as to the financial products and strategies they deploy to achieve those mandates.
Although imperfect, the IRA’s tax credits scored some significant wins that should undoubtedly inform future policy. The law took an existing system of technology-specific subsidies that had been on the books in some form since 1978 and made them technology-neutral, allowing developers of nearly any zero-emissions energy technology to access tax relief. It expanded the credits to domestic manufacturers of certain low- and zero-carbon technologies. It created a tax credit transfer market, allowing developers with limited tax liability to sell their credits for cash on an open market to any tax-liable buyer, rather than engage in expensive and complex “tax equity” transactions with a few large banks. It made certain credits directly accessible to tax-exempt entities, significantly broadening the pool of potential users. And most of these credits remained entirely uncapped ― a “bottomless mimosa” for developers that spurred over $321 billion in clean energy and manufacturing investments and supported more than 2,000 new facilities across the country.
To be sure, the IRA did not level the playing field perfectly across developers or across technologies. Developers of energy transmission, grid transformers, and electric rail were shut out of the credits. Tax-exempt public and nonprofit developers ― entities as large as the New York Power Authority and as small as local churches ― could not monetize depreciation or participate in the transfer market. And some credits remained capped, forcing developers to apply and cross their fingers. But as early as 2023, Goldman Sachs argued that even with these inadequacies ― which have easy legislative and statutory fixes ― the IRA would still have spurred over $3 trillion in investment by 2033.
The GOP has gutted much of this system, shortcomings and all, and replaced it with a tangle of red tape. The energy tax credits are once again technology-specific ― solar and wind developers have a few months left to start a project and claim the credits as written, though what it means to start a project got more complex just yesterday. But even the “clean firm” energy technologies that can still claim credits until 2032, such as nuclear and geothermal, may not be safe under new “foreign entity of concern” rules, which condition credits on developers’ ability to limit their reliance on Chinese suppliers and investment, requiring them to map out their supply chains at an unprecedented level of detail.
Democrats seeking to restore and build upon this plank of the IRA have their work cut out for them. The developers and manufacturers of any technology that contributes to zero-emissions energy production should be able to access and monetize federal support regardless of their tax status and free from the rigmarole and uncertainties imposed by competitive application procedures. Goldman Sachs’ $3 trillion estimate is now the lower bound of what’s possible — for instance, a tax credit for transmission investments suggested as part of Build Back Better but excluded from the IRA could have catalyzed over $15 billion in investment and supported the economics of all other energy projects. To the degree that the tax credits can help build industrial capacity and institutional support for decarbonization, future policymaking should maximize their remit and their distribution.
Tax credits alone, however, are hardly a skeleton key to decarbonization. Being disbursed only once a project is complete, tax credits do not substitute for the kinds of upfront financial support that project developers — especially developers of emerging technologies — require to complete their projects in the first place. Private investors have been comfortable with solar, batteries, and onshore wind because these projects can be completed, claim their tax credits, and earn revenues on the grid on a mostly predictable timetable. But new nuclear reactors, geothermal, hydrogen, green steel, and carbon capture are unfamiliar investments, have uncertain development pathways and return profiles, and thus remain un-bankable to investors.
This is why BIL and IRA created powerful programs worth tens of billions of dollars to finance the deployment of emerging clean technologies and break this vicious cycle of uncertainty. The Office of Clean Energy Demonstrations, or OCED, and the Loan Programs Office, or LPO, in particular, were empowered to support, at scale, the testing and commercialization of these emerging technologies as well as conversions of whole electricity grids.
OCED, with over $27 billion in appropriations, set up hubs for hydrogen and carbon capture projects across the country, and funded a suite of advanced steel and iron decarbonization projects. Endowed by BIL and IRA with over $15 billion in total credit subsidy and well over $300 billion in total loan authority, LPO made ambitious investments across a host of innovative technology categories, including ― but certainly not limited to ― energy storage, sustainable aviation fuels, virtual power plants, EV charging, and bioenergy. At the end of 2024, the LPO had over 200 loan applicants in its queue.
By rescinding OCED’s unobligated funding, ambiguously rewriting LPO’s lending authorities (while rescinding most of its unobligated credit subsidy), and pulling the plug on billions of dollars worth of conditional commitments, the GOP has stopped years of progress in its tracks. In the meantime, LPO has shed considerable staff while the administration has prevented it from making any new commitments. The combination of the “foreign entity of concern” rules constraining tax credit eligibility and this shuttering of federal financing opportunities could seriously throttle the development and commercialization of nuclear energy in particular, the darling du jour of Republicans’ energy strategy.
If these offices were once the engines of decarbonization, they needed a stronger spark plug. The LPO, in particular, has a special authority to finance state government-backed, non-innovative clean energy projects, such as regional battery manufacturing clusters or a state power developer’s renewables portfolio, but has never used it. And while OCED and LPO can provide developers with some degree of upfront support, LPO cannot easily provide construction loans, cannot derisk project cash flows to provide security to investors, and cannot mandate offtake. These deficiencies prevent ambitious borrowers with unproven technologies from scaling up: they scare off private lenders in the infrastructure sector, many of which are skittish about construction risk, require project developers to demonstrate three to five years of stable cash flows, have a low tolerance for market price uncertainty, and have shareholders who demand a certain level of returns.
The DOE can bridge this “valley of death” by using its broader market-shaping authorities to take a more aggressive “dealership” role in these sectors, providing stable offtake for developers through upfront purchasing while becoming a reliable source of supply to downstream customers (like an actual car dealership or a grocery store). The DOE has in fact already used this approach to provide demand-side support to its now-endangered hydrogen hubs through OCED.
These kinds of public dealership arrangements are not unique or path-breaking: The Federal Reserve’s backstop of the municipal bond market in 2020, nonprofit investor Climate United’s planned EV trucking purchase-and-lease program in California, and even the Department of Defense’s recent MP Materials deal are all examples of public entities addressing a mismatch in the supply of and demand for a critical good and, in doing so, shaping markets toward public ends.
For all that BIL and IRA built avenues for developing and deploying energy technologies, they were also full of programs aimed at distributing the fruits of decarbonization equitably. Both the energy community bonus credits, a provision in the IRA that increased the value of the energy tax credits for projects in poorer, higher-unemployment, and energy facility-adjacent communities, and President Biden’s Justice40 initiative, which directed 40% of federal spending toward poorer and more rural communities, exemplified the administration’s “place-based” approach to industrial policy and economic development. The Biden administration heavily encouraged disadvantaged communities, local governments, schools, nonprofits, and tribal nations to develop their own clean energy projects — aided by the IRA’s direct pay mechanism, which allowed tax-exempt entities to access subsidies — by drawing on the various local decarbonization programs in BIL and IRA.
The Greenhouse Gas Reduction Fund, perhaps the most important of these programs, exemplifies the promises and pitfalls of the administration’s approach to “place-based” industrial policy. Managed by the Environmental Protection Agency, GGRF provided $27 billion to disadvantaged communities for the financing of rooftop solar, zero-emissions transport, and net-zero housing. That pot was split into three thematic buckets ― $7 billion to the Solar for All program, specifically for rooftop solar development; $14 billion to the National Clean Investment Fund, for supporting clean energy project finance more broadly in disadvantaged communities; and $6 billion more to local and regional technical assistance providers. Each program then subdivided its appropriations further. Solar for All went to 60 recipients across the country via a competitive application. The National Clean Investment Fund’s $14 billion was split among three awardees, each a coalition of various financial institutions designed to lend to energy projects, such as green banks, impact investors, and nonprofits ― and each of those recipient coalitions planned to subdivide much of its funds still further, first among coalition partners and then to subordinate local and state partners.
That dizzying program structure was meant to endow local communities with the ability to finance their own projects. And by including so many nonprofit institutions, GGRF could make significant inroads into Republican states, whose officials might otherwise reject federal funding.
But there was not much coordination between partners and subawardees around how best to deploy those funds. And what seemed like a firehose of financing often reached local recipients as a trickle of pre-development and technical assistance grants. Demanding that local organizations build their own capacity to plan, finance, and develop projects (or hire expensive external consultants to do so) ― with limited and one-time funds, no less ― is duplicative and inefficient, and it defeats GGRF’s own stated goal of mobilizing private capital through building standardized markets for decarbonization, thereby slowing down the pace of emissions reductions. The program’s complexity also left it vulnerable to EPA Administrator Lee Zeldin’s efforts to hound the program in court and freeze its funding.
Pandemic-era proposals for a National Investment Authority, as well as legislative proposals for a national green bank ― predecessors to the GGRF ― differ sharply from this status quo, instead highlighting how public finance can benefit from economies of scale. Larger financial institutions tasked with deploying clean energy projects can more easily prepare portfolios of projects for co-investors, engage with utilities, raise debt on municipal bond markets, and build a bench of trustworthy private developers to contract for projects. If they are publicly administered, these institutions can also take more risk, undercut private lenders, support more developers, engage with local communities to meet their needs, and use revenues from higher-return projects to derisk lower-return projects that might be necessary to build to achieve their resilience and affordability goals.
Should policymakers get a second shot at building a national green bank system, they should not try to recreate GGRF’s fractal approach to energy finance. Rather, policymakers must ensure that financing sits in the hands of public agencies that already have the authorities and expert staff to be ambitious market-shapers: bond banks, state-led energy finance authorities, and public developers. The good news is that state-level green banks empowered with state funding and a political mandate are already exercising their capacities to shape markets and support disadvantaged communities directly: the New York Power Authority, the Minnesota Climate Innovation Finance Authority, the Connecticut Green Bank, and the Greater Arizona Development Authority, to name a few, are all taking it upon themselves to raise debt and contract with developers to undertake ambitious energy and infrastructure investment programs.
But Democrats should be clear-eyed about the consequences of this reorientation: It means rejecting the prevailing wisdom that local nonprofits should necessarily coordinate local project development. Local groups can be extremely effective advocates for communities’ needs ― but in contrast to public investment agencies, their capacity to finance and implement solutions is simply not great enough.
This analysis of IRA and BIL leaves out more parts of the laws than it includes ― to take just one example, the BIL’s $5 billion National Electric Vehicle Infrastructure charging station program. But the story is similar: Ambitious as it seemed, NEVI money could only flow when state governments set up implementation offices and had their spending plans approved by federal officials. Most states, which had not prepared for any of this, took years to build the requisite capacity ― just in time for the Trump administration to try and snatch away the funding (though it recently admitted defeat in that project). In fairness to state governments, the EV charging sector is incredibly new. But even this program highlights how IRA and BIL lacked the capacity to be implemented as quickly and efficiently as their supporters hoped.
Going above and beyond BIL and IRA to deliver an energy policy that stabilizes Americans’ cost of living while driving an energy transition away from fossil fuels and toward the technologies of the future ― Democrats should embrace this challenge. But they should also be aware that climate ambition runs headlong into the same institutional problems facing American democracy at large. The Senate filibuster prevents either party from comprehensively redesigning the federal government, its institutions, and its regulations to serve Americans more quickly and more efficiently. That leaves both parties reliant on budget reconciliation ― to our detriment. The head-spinning design of GGRF was itself an artifact of the reconciliation process, which prevented Congress from creating a single green bank institution or giving it a specific mandate; its awardee organizations and coalitions certainly did not ask for the program structure they got.
There’s a lot more that budget reconciliation will never solve: the century-old American utility system, the regulatory thicket of U.S. electricity markets, or the land use and permitting rules that constrain project development and grid interconnection. And things could get worse: Trump-appointed judges and Supreme Court justices who reject federal agencies’ and state governments’ attempts to regulate fossil fuel infrastructure have placed the legal system itself at odds with responsible energy system management. The courts may no longer be able to block clawbacks and recissions of legally obligated federal spending. Democrats, like clean energy developers, do not fight on a level playing field.
While Democrats are out of federal power, they should practice ambitious climate policymaking at the state level. States already have considerable ability to raise finance and build capacity for ambitious infrastructure projects ― and they might have to quickly, considering the drain of federal capacity that might support them. By developing their own public programs for transmission finance, utility-scale battery procurement, virtual power plants, and clean firm energy pilots, Democratic state governments can ensure that the ecosystem of clean energy developers created by BIL and IRA does not disappear for lack of demand — and in doing so, these states would help stabilize the cost of clean energy project development.
Finally, Democrats should not forget that climate remains a cost of living issue. In a city like New Orleans, rocked by the recent nuclear outage, residents spend, on average, over 19% of their incomes on their energy bills, over three times the DOE’s threshold to be considered an energy-burdened community. Their bills already include adders for climate adaptation and disaster preparedness ― yet, for all they spend, they still face blackouts, and their costs will only increase as their grid continues to deteriorate. Here, climate policy is not about combating Chinese supply chain dominance, or even about delivering an American industrial renaissance. It’s about keeping the lights on, keeping bills low, keeping the air clean, and keeping residents safe from disaster.
It turns out that voters all over the country still care about these goals. A majority of likely voters in the next election think climate change will have a direct impact on their or their family’s finances. This constituency is still in play — and given sharply deteriorating macroeconomic conditions, soon-to-spike electricity prices, and the ever-increasing threat of climate disaster, these cost-of-living-focused voters could be far more vocal, relevant, and hungry for change than a coalition built on vague sabre-rattling against China.
In 2022, Democrats made a valiant first attempt to transform the state itself. Perhaps it was inadequate, perhaps it was impossible to do more at the time, but that’s no reason not to think seriously about the kind of policymaking, institutional, and financial interventions that would be called for should they get a second shot at realizing that goal. The rollback of the IRA only reveals how much Democrats left on the table three years ago ― and how much farther a real climate policy could go.
Editor’s note: This story has been updated to clarify the relationship between the unplanned nuclear shutdown and the power outage in New Orleans.
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The new climate politics are all about affordability.
During the August recess, while members of Congress were back home facing their constituents, climate and environmental groups went on the offensive, sending a blitz of ads targeting vulnerable Republicans in their districts. The message was specific, straightforward, and had nothing to do with the warming planet.
“Check your electric bill lately? Rep. Mark Amodei just voted for it to go up,” declared a billboard in Reno, Nevada, sponsored by the advocacy group Climate Power.
“They promised to bring down prices, but instead our congressman, Derrick Van Orden, just voted to make our monthly bills go up,” a YouTube ad told viewers in Wisconsin’s 3rd district. “It removes clean energy from the electric grid, creating a massive rate hike on electricity,” the voiceover says, while the words “VAN ORDEN’S PLAN: ELECTRICITY RATE HIKE” flash on screen. The ad, paid for by Climate Power, the League of Conservation Voters, and House Majority Forward, a progressive campaign group, was shown more than a million times from August 13 to 27, according to Google’s ad transparency center.
Both were part of a larger, $12 million campaign the groups launched over the recess in collaboration with organizations including EDF Action and Climate Emergency Advocates. Similar billboards and digital ads targeted Republicans in more than a dozen other districts in Arizona, California, Colorado, Iowa, Michigan, New York, Ohio, Pennsylvania, and Texas. There were also TV spots, partnerships with Instagram influencers, bus stop posters, and in-person rallies outside district offices — all blaming Republicans in Congress for the increasing cost of food, healthcare, and energy.
Courtesy of Climate Power
As others have observed, including Heatmap’s Matthew Zeitlin back in March, rising utility rates and the broader cost of living crisis are becoming a political liability for Republicans and President Trump. Clean energy advocates are attempting to capitalize on that, trying to get Americans to connect the dots between their mounting electricity bills and their representatives in Congress who voted to cut support for renewable energy.
Some of this is run-of-the-mill politicking, but it’s not only that. It also represents a strategic shift in how the climate movement talks about the energy transition.
It’s not new for green groups to make the argument that renewable energy can save people money. Relying on “free” wind and sun rather than fuels that are subject to price volatility has always been part of the sell, and the plummeting cost of solar panels and wind turbines have only made that pitch more compelling.
But it is new for the affordability argument to come first — above job creation, economic development, reducing pollution, and, of course, tackling climate change.
For most of the past four years, the climate movement has gone all in on trying to build an association in the American mind between the transition to clean energy and jobs. “When I think of climate change, I think of jobs,” then-candidate Joe Biden said during one of his 2020 campaign speeches.
It made sense at the time, Daniel Aldana Cohen, a sociologist at the University of California, Berkeley, told me. Just two years earlier, the Sunrise Movement had emerged as a political force with a headline-grabbing rally in Nancy Pelosi’s office demanding “green jobs for all.” The group was joined by then-newly elected Representative Alexandria Ocasio-Cortez, who soon introduced her framework for a Green New Deal that would offer a “just transition” for fossil fuel workers, ensuring them a place in the new clean energy economy.
The fossil fuel industry had seeded divisions between labor and environmental groups for decades by arguing that regulations kill jobs, and Democrats would have to upend that narrative if they wanted to make progress on climate. But the rationale was also more pressing: Unemployment was skyrocketing due to the COVID-19 pandemic, and whoever won the presidency would be responsible for rebuilding the U.S. workforce.
Fast forward to the end of Biden’s first year in office, however, and the unemployment rate had snapped back to pre-pandemic levels. Meanwhile, inflation was rising fast. Even though the Democrats managed to name their climate bill the “Inflation Reduction Act,” the administration and the climate movement continued talking about it in terms of jobs, jobs, jobs.
Cohen co-directs the Climate and Community Institute, a progressive think-tank founded in 2020, and admitted that “from the very start, we would just model every policy with jobs numbers,” partly because modeling the effects of policies on cost of living was a lot more complicated. Now he sees two issues with that approach. For one, it was always going to take time for new manufacturing jobs to materialize — much longer than an election cycle. For another, when unemployment is low, “everybody experiences inflation, but extremely few people experience a good new green job,” Cohen said.
During a recent panel hosted by the Institute for Policy Studies, Ben Beachy, who was a special assistant to Biden for climate policy, expressed some regret about the jobs push. “It wasn't addressing one of the biggest economic concerns of most people at that point, which was the rent is too damn high,” he said. But Beachy also defended the strategy, noting that all of the policies addressing cost of living in Biden’s big climate bill, like money for housing, public transit, and childcare, had been stripped out to appease West Virginia Democrat Joe Manchin. “So we were left without a strong policy leg to stand on to say, this is going to lower your costs.”
When the moderator asked what message Beachy thinks climate candidates should run on today, Beachy replied, “affordability, affordability, affordability.”
Jesse Lee, a senior advisor at Climate Power who also worked as a senior communications advisor in the Biden White House, echoed Beachy’s account of what went wrong post-IRA. The cost of living crisis makes it almost impossible to talk about anything else now, he told me. “If you don't start off talking about that, you’ve lost people before you’ve even begun,” he said.
Average U.S. electricity rates jumped 10% in just the year from 2021 to 2022, and have continued to rise faster than inflation. All evidence suggests the trend will continue. Utilities have already requested or received approval for approximately $29 billion in rate increases this year, according to the nonprofit PowerLines, compared to roughly $12 billion by this time last year. And these increases likely don’t reflect the expected costs associated with ending tax credits for wind and solar, hobbling wind and solar development, and keeping aging, expensive coal plants online.
In mid-July, Climate Power issued a strategy document advising state and local elected officials how to talk about clean energy based on the group’s polling. A post-election poll found that “more than half of Americans (51%) say the main goal of US energy policies should be to lower energy prices,” and that 85% “believe policymakers should do more to lower energy costs.” A more recent poll found that telling voters that “cutting clean energy means America produces less energy overall, and that means families will pay even more to keep the lights on,” was the most persuasive among a variety of arguments for clean energy.
This tracks with our own Heatmap Pro opinion polling, which found that the top perceived benefit of renewables in the U.S. is “lower utility bills” — though while 75% of Democrats believe that argument, only 56% of Republicans do. An affordability frame also aligns with academic research on clean energy communication strategies, which has found that emphasizing cost savings is a more effective and enduring message than job creation, economic development, or climate change mitigation.
The pivot to affordability isn’t just apparent in district-level campaigns to hold Republicans accountable. Almost every press release I’ve received from the climate group Evergreen Action this month has mentioned “soaring power bills” or “Trump’s energy price hike” in reference to various actions the administration has taken to hamstring renewables. Even clean energy groups, which at first attempted to co-opt Trump’s “energy dominance” frame, can no longer parrot it with a straight face. After Trump issued a stop work order on Orsted’s offshore Revolution Wind project, which is 80% built, the American Clean Power Association accused the administration of “raising alarms about rising energy prices while blocking new supply from reaching the grid.”
Several people I spoke to for this story pointed to the example of Mikie Sherill, the Democrat running for governor in New Jersey, who last week vowed to freeze utility rates for a year if elected. She immediately followed that statement with a promise to “massively expand cheaper, cleaner power generation,” including solar and batteries.
Dan Crawford, the senior vice president of Echo Communications Advisors, a climate-focused strategy firm, declared in a recent newsletter that Democrats should “become the party of cheap electricity.” He mused that we may be at an inflection point “where the old politics of clean-vs.-polluting makes way for a new debate of cheap-vs.-expensive.”
Debate is probably too tame a term — the claim to affordability is becoming a full-on messaging war. Last week, President Trump took to social media to declare that states that get power from wind and solar “are seeing RECORD BREAKING INCREASES IN ELECTRICITY AND ENERGY COSTS,” — a claim that has no basis in reality. The Trump administration is leaning heavily on affordability arguments to justify keeping coal plants open. In defense of canceling Revolution Wind, Interior Secretary Doug Burgum told Fox News that “this is part of our drive to make sure we’ve got affordable, reliable energy for every American … These are the highest electric prices in the country coming off of these projects.” On Thursday, Energy Secretary Chris Wright posted a news story about his agency rescinding a loan for an offshore wind transmission project, writing that “taxpayers will no longer foot the bill for projects that raise electricity prices and ultimately don't work.”
Clean energy proponents aren’t just going up against Trump — the fossil fuel industry has leaned on affordability as a rhetorical strategy for a long time, Joshua Lappen, a postdoctoral fellow at the University of Notre Dame studying the energy transition, told me. Lappen, who lives in California, said cost has been at the forefront of conflicts over climate policy in the state for a while. At the moment, it’s driving a fight over oil refinery closures that threaten to drive up gas prices even more. “I took a trip over the weekend and drove through the Central Valley,” Lappen told me, “and there are placards zip-tied to every gas pump at Chevron stations that are highlighting that state climate policy is increasing the cost of gas.”
I asked Lee, of Climate Power, how the climate movement could make a convincing case when clean energy has become so politically charged. He’s not worried about that right now. “I don’t think we necessarily need to win a debate about what’s cheaper,” he said. “All we have to do is say, Hey, we're in favor of more energy, including wind and solar, and it's nuts, nuts to be taking wind and solar and batteries off the table when we have an energy crisis and when utility rates have gone up 10%.”
That may work for now, at least at the national level. Americans tend to blame whoever is in office for the economic pains of the moment, even though presidents have little influence on prices at the pump and it can take years for policy changes to make their way into utility rates.
But there’s a difference between defensively blaming rising energy costs on the administration’s efforts to block renewables, and making a positive case for the energy transition on the same grounds. While there is an argument for the latter, it’s a lot harder to convey.
The factors pushing up energy prices, such as necessary grid modernization and disaster-related costs, likely aren’t going away, whether or not we build offshore wind farms. Meanwhile, the savings that large-scale wind and solar projects offer won’t be experienced as a reduction in rates — they won’t be experienced at all because they’re measured against a counterfactual world where renewables don’t get built. That’s a lot trickier to communicate in a pithy campaign. People may end up blaming the wind farms either way.
This dilemma is a hallmark of the so-called “mid-transition,” Lappen told me. The term was coined by his advisor, the energy engineer and sociologist Emily Grubert, and Sara Hastings-Simon, a public policy professor at the University of Calgary. The two argue that the mid-transition is a period where fossil fuel systems persist alongside the growing clean energy sector.
“Comparisons of the new system to the old system are likely to rest on experience of a world less affected by climate change, such that concerns about lower reliability, higher costs, and other challenges might be perceived as inherent to zero-carbon systems, versus energy systems facing consequences of climate change and long-term underinvestment,” they write.
To Cohen, advocates need to go a lot further than rhetoric to link clean energy with affordability. “We need to rebuild the brand and then rebuild the investment priorities of climate action so that working class communities see and literally touch direct, tangible benefits in their life,” he said. He described a “green economic populism” with much more public investment in helping renters access green technologies that will lower their bills, for example, or in fixing up homes that have deferred maintenance so that they can eventually make energy efficiency improvements.
It’s not about abandoning industrial policy or research and development, Cohen told me, but rather about a shift in emphasis. He pointed to Sherill’s approach. “She's not just saying, oh, clean energy will automatically lower bills if you just unleash it. She's like, I'm going to assertively use the government to guarantee a price freeze, and then I’m going to backfill that with clean energy policies to bring down prices over time.”
To be fair, the IRA did contain policies that would have produced more tangible benefits. The $7 billion Solar for All program would have delivered the benefits of residential solar — i.e. energy bill savings — to low-income households all over the country. The remainder of the Greenhouse Gas Reduction Fund, of which Solar for All was a part, was set to make a range of other green home upgrades more accessible to the working class, and the Green and Resilient Retrofit Program would have done the same for low-income housing developments and senior living centers. Electric school bus grants and urban tree-planting programs would have brought cleaner, cooler air to communities.
These were big, ambitious programs that were never going to produce results in the span of two years, and now the Trump administration has made every effort to ensure they never do. Whether they would have paid political dividends eventually, we’ll never know. But a successful energy transition may depend on giving it another shot.
On fusion’s big fundraise, nuclear fears, and geothermal’s generations uniting
Current conditions: New Orleans is expecting light rain with temperatures climbing near 90 degrees Fahrenheit as the city marks the 20th anniversary of Hurricane Katrina • Torrential rains could dump anywhere from 8 to 12 inches on the Mississippi Valley and the Ozarks • Japan is sweltering in temperatures as high as 104 degrees.
The Environmental Protection Agency is preparing to propose a new Clean Water Act rule that would eliminate federal protections for many U.S. waterways, according to an internal presentation leaked to E&E News. If finalized, the rule would establish a two-part test to determine whether a wetland received federal regulations: It would need to contain surface water throughout the “wet season,” and it would need to be touching a river, stream, or other body of water that flows throughout the wet season. The new language would require fewer wetland permits, a slide from the presentation showed, according to reporter Miranda Willson. Two EPA staffers briefed on the proposal confirmed the report.
The new rule follows the 2023 Supreme Court decision in Sackett v. EPA, which said that only waterways “with a ‘continuous surface connection’ to a ‘relatively permanent’ body of water” fell under the Clean Water Act’s protections, according to E&E News. What “relatively permanent” means, however, the court didn’t say, nor did Biden’s EPA. The two EPA staffers, who were granted anonymity to avoid retribution, “said they believed the proposal was not based in science and could worsen pollution if finalized,” Willson wrote.
Investors are hot on the Massachusetts Institute of Technology spinoff promising to make fusion energy a reality. Commonwealth Fusion Systems netted an eye-popping $863 million in its latest fundraising round. In a press release Thursday, the company said that its “oversubscribed round of capital is the largest amount raised among deep tech and energy companies since” its $1.8 billion financing deal in 2021. Commonwealth Fusion will use the funds to complete its demonstration project and further develop its proposed first power plant in Virginia. To date, the company said, it has raised close to $3 billion, “about one-third of the total capital invested in private fusion companies worldwide.” It’s a sign that investors recognize Commonwealth Fusion “is making fusion power a reality,” CEO Bob Mumgaard said.
The fusion industry has ballooned over the past six years. “It is finally, possibly, almost time” for the technology to arrive, Heatmap’s Katie Brigham wrote last year, noting: “For the ordinary optimist, fusion energy might invoke a cheerful Jetsons-style future of flying cars and interplanetary colonization. For the cynic, it’s a world-changing moment that’s perpetually 30 years away. But investors, nuclear engineers, and physicists see it as a technology edging ever closer to commercialization and a bipartisan pathway towards both energy security and decarbonization.”
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A record 75 gigawatts of new generating capacity hooked up to the U.S. power grid last year, a 33% surge from the previous year, thanks to new federal regulations aimed at streamlining the process. That’s according to new data from the consultancy Wood Mackenzie published Thursday. The report found that the Federal Energy Regulatory Commission’s Order No. 2023, issued in July 2023, along with other reforms by independent system operators, have had a “considerable impact on processing interconnection agreements, by driving improvements through reducing speculative projects and clearing queue backlogs.” While connections increased, regional grid operators received 9% fewer new project entries and saw a 51% uptick in non-viable projects since 2022.
Solar and storage technologies made up 75% of all interconnection agreements in 2024, equaling about 58 gigawatts. Wood Mackenzie projected that the sectors will retain a similar market share in 2025. Natural gas saw an increase in interconnection requests since 2022, adding 121 gigawatts of capacity. New gas applications are already breaking annual records this year. But overall the number of gas projects that successfully hook up to the grid is down 25% since 2022.
Almost 200 people have left the Nuclear Regulatory Commission since President Donald Trump’s inauguration in January, according to new estimates published Thursday in the Financial Times. Of the 28 officials in senior leadership positions, nearly half are working in an “acting” capacity, and only three of the five NRC commissioner roles are filled. “It is an unprecedented situation with some senior leaders having been forced out and many others leaving for early retirement or worse, resignation,” Scott Morris, the former NRC deputy executive director of operations, who retired in May, told the newspaper. “This is really concerning for the staff and is one of the factors causing many key staff and leaders to leave the agency they love ... creating a huge brain drain of talent.”
The exodus comes as Trump is pressing the agency to dramatically overhaul and speed up its review and approval process for new reactors. Supporters of the president’s effort say the NRC has stymied the nuclear industry for decades, and a future buildout of new reactors requires clearing house. But skeptics of the burn-it-all-down approach warn that the atomic energy industry’s success in avoiding major accidents since the 1979 partial meltdown at Three Mile Island is owed to NRC oversight, and that the agency’s processes have actually protected nuclear developers by avoiding frivolous lawsuits and not-in-my-backyard types.
Geothermal giant Ormat has reigned over the global industry of harvesting energy from hot underground reservoirs for the past 60 years. Now a new generation of companies is promising to tap the Earth’s heat even in places without water by using fracking technology to drill much deeper, vastly expanding the potential for geothermal. And Ormat has placed a big bet on one. On Thursday, the company inked a strategic partnership with Houston-based Sage Geosystems. As part of the deal, Sage will build its first commercial power plant at an existing Ormat facility in Nevada or Utah, significantly speeding up the timeline for the debut generating station. Sage CEO Cindy Taff told me the plant could be online by next year. “Ormat’s chosen a winner,” Yakov Feygin, a researcher at the Center for Public Enterprise who co-authored a report on next-generation geothermal, told me.
A majority of U.S. voters are still unfamiliar with geothermal power, according to a new poll from Data for Progress I reported on this week. When exposed to details about how the technology works, however, support grows among voters across the political spectrum. Republicans in particular are supportive.
A recent poll shows a lack of familiarity with geothermal.Data for Progress
The Grammy- and Oscar-award winning New Orleans jazz and funk singer Jon Batiste released a new song to mark the 20th anniversary of Hurricane Katrina, the catastrophic storm that flooded his home city. Dubbed “Petrichor,” a word that describes the scent of earth after rain, the lyrics unfold like a haunting hymn over a driving beat. “Help me, Lord / They burning the planet down / No more second linin' in the street / They burning the planet down, Lord / Help me, Lord / No more plants for you to eat.” In an interview published in The Guardian, Batiste said the song was meant to be a statement. “You got to bring people together. People power is the way that you can change things in the world,” he said. “It’s a warning, set to a dance beat.”
How the Migratory Bird Treaty Act could become the administration’s ultimate weapon against wind farms.
The Trump administration has quietly opened the door to strictly enforcing a migratory bird protection law in a way that could cast a legal cloud over wind farms across the country.
As I’ve chronicled for Heatmap, the Interior Department over the past month expanded its ongoing investigation of the wind industry’s wildlife impacts to go after turbines for killing imperiled bald and golden eagles, sending voluminous records requests to developers. We’ve discussed here how avian conservation activists and even some former government wildlife staff are reporting spikes in golden eagle mortality in areas with operating wind projects. Whether these eagle deaths were allowable under the law – the Bald and Golden Eagle Protection Act – is going to wind up being a question for regulators and courts if Interior progresses further against specific facilities. Irrespective of what one thinks about the merits of wind energy, it’s extremely likely that a federal government already hostile to wind power will use the law to apply even more pressure on developers.
What’s received less attention than the eagles is that Trump’s team signaled it could go even further by using the Migratory Bird Treaty Act, a separate statute intended to support bird species flying south through the U.S. from Canada during typical seasonal migration periods. At the bottom of an Interior press release published in late July, the department admitted it was beginning a “careful review of avian mortality rates associated with the development of wind energy projects located in migratory flight paths,” and would determine whether migratory birds dying because of wind farms qualified as “‘incidental’ takings” – harm or death – under the Migratory Bird Treaty Act.
While not stated explicitly, what this means is that the department appears to be considering whether to redefine these deaths as intentional under the Migratory Bird Treaty Act, according to Ben Cowan, a lawyer with the law firm Troutman Pepper Locke.
I reached out to Cowan after the eagle investigation began because his law firm posted a bulletin warning that developers “holding active eagle permits” might want to prepare for “subpoenas that may be forthcoming.” During our chat earlier this month, he told me that the eagle probe is likely going to strain financing for projects even on private lands that wouldn’t require any other forms of federal sign-off: “Folks don’t want to operate if they feel there’s a significant risk they might take an eagle without authorization.”
Cowan then voiced increasing concern about the migratory bird effort, however, because the law on this matter could be a quite powerful – if legally questionable – weapon against wind development.
Unlike the Endangered Species Act or the eagle protection law, there is currently no program on the books for a wind project developer to even obtain a permit for incidental impacts to a migratory bird. Part of the reason for the absence of such a program is the usual federal bureaucratic struggle that comes with implementing a complex statute, with the added effect of the ping-pong of federal control; the Biden administration started a process for permitting “incidental” impacts, but it was scrapped in April by the Trump team. Most protection of migratory birds under the law today comes from voluntary measures conducted by private companies and nonprofits in consultation with the federal government.
Hypothetically, hurting a migratory bird should be legally permissible to the federal government. That’s because the administration loosened implementation of the law earlier this year with an Interior Department legal opinion that stated the agency would only go after harm that was “intentional” – a term of art under the statute.
This is precisely why Cowan is fretting about migratory birds, however. Asked why the wind industry hasn’t publicly voiced more anxiety about this potential move, he said industry insiders genuinely hope this is “bluster” because such a selective use of this law “would be so beyond the pale.”
“It’s basically saying the purpose of a wind farm is to kill migratory birds, which is very clearly not the case – it’s to generate renewable electricity,” Cowan told me, adding that any effort by the Interior Department would inevitably result in lawsuits. “I mean, look at what this interpretation would mean: To classify it as intentional take would say the purpose of operating a wind farm would be to kill a bird. It’s obviously not. But this seems to be a way this administration is contemplating using the MBTA to block the operation of wind farms.”
It’s worth acknowledging just how bonkers this notion is on first blush. Is the federal government actually going to decide that any operating wind farm could be illegal? That would put entire states’ power supplies – including GOP-heavy states like Iowa – in total jeopardy. Not to mention it would be harmful overall to take operating capacity offline in any fashion at a moment when energy demand is spiking because of data centers and artificial intelligence. Even I, someone who has broken quite a few eye-popping stories about Trump’s war on renewables, struggle to process the idea of the government truly going there on the MBTA.
And yet, a door to this activity is now open, like a cleaver hanging over the industry’s head.
I asked the Interior Department to clarify its timeline for the MBTA review. It declined to comment on the matter. I would note that in mid-August, the Trump administration began maintenance on a federal dashboard for tracking regulations such as these and hasn’t updated it since. So we’ll have to wait for nothing less than their word to know what direction this is going in.