You’re out of free articles.
This Halloween, get 20% off using code ADVANCED
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
Carbon capture might be EPA’s strongest tool to cut emissions from power plants. That could scramble battle lines.

Carbon capture, one of the most controversial climate solutions, could soon become a centerpiece of U.S. climate policy.
The Environmental Protection Agency is expected to finally unveil its proposal to cut emissions from power plants next week. In the lead up to the announcement, The New York Times reported that the agency is planning to set greenhouse gas emission limits for new and existing power plants based on the reductions that could be achieved by installing equipment to catch emissions from plant smokestacks before they enter the atmosphere.
The funny thing is, whether you see promise in carbon capture or deem it a boondoggle, this is probably the most aggressive approach the EPA can take for power plants. It could even speed up the transition to renewable energy. And for that reason, it’s going to put both proponents and critics of the technology in a weird position, scrambling the usual battle lines on the subject.
Due to the Supreme Court’s ruling in last year’s West Virginia vs. EPA case, the agency’s legal avenues for reducing emissions from the power sector are limited. It can’t force utilities to shut down their fossil fuel power plants and switch to renewables. Instead, it must stick to reductions that can be achieved “within the fenceline” of a power plant.
That leaves a few options. The agency could base its rule on improvements to power plant efficiency. It could look to the potential for coal plants to co-fire with gas or for gas plants to burn hydrogen. But neither would reduce emissions as much as a rule based on carbon capture, Lissa Lynch, a senior attorney at the Natural Resources Defense Council told me in an email. And the Inflation Reduction Act, which contained huge tax credits for carbon capture, makes it possible for the agency to argue that carbon capture is an economically feasible solution, as my colleague Robinson Meyer has reported.
Here’s the twist: That doesn’t mean that every plant would have to install carbon capture. States would have the authority to create their own implementation plans to comply with the standard, and a range of options for how to do it. They might choose to shut down some power plants and replace them with renewables, or operate plants less frequently. But since renewables are so cheap, shifting to solar, wind, and batteries may be the more common response than investing in carbon capture.
The research firm Rhodium Group recently modeled the potential emission reductions from carbon capture-based power plant rule, taking into account new tax credits from the Inflation Reduction Act, and found that only about 20 gigawatts’ worth of coal and gas plants would end up installing carbon capture by 2035. By comparison, some 700 gigawatts of coal and gas plants operate today.
Over the past few years, under increased pressure from investors to show what they are doing about climate change, the oil and gas industry has ramped up its advocacy for carbon capture. Many fossil fuel producers and electric utilities now have net-zero plans that rely heavily on the technology. In 2021, ExxonMobil announced plans to work with 15 other companies to develop a $100 billion carbon capture hub in Houston. DTE, a Michigan utility that owns power plants in California, may have even engineered an entire dark money campaign to convince California regulators to make carbon capture part of the state’s climate plan.
In the American Petroleum Institute’s 2021 Climate Action Framework, the lobbying group said one of its goals was to “Fast-track the Commercial Deployment of Carbon Capture, Utilization and Storage,” and wrote that it “supports federal policies to achieve the ‘at-scale phase’ of CCUS commercial deployment.” (CCUS stands for carbon capture, utilization, and storage.)
On social media, API paints carbon capture as a present-day solution. “Advancements in carbon capture technology from the brightest minds in the energy industry are slashing emissions and creating a cleaner future,” it recently tweeted.
At the same time, large swaths of the environmental community have joined together to oppose the technology. In July 2021, more than 500 organizations signed on to a letter to U.S. leaders in Washington arguing that carbon capture is not a climate solution. “Simply put, technological carbon capture is a dangerous distraction,” the groups wrote. “We don’t need to fix fossil fuels, we need to ditch them.” Many, many environmental groups have published treatises on why carbon capture is unproven, too expensive, harms communities, and prolongs dependence on fossil fuels.
But as the new power plant regulations loom, proponents of carbon capture have started to temper their enthusiasm, citing some of those same concerns.
In comments submitted to the EPA in March, the American Petroleum Institute’s vice president of natural gas markets, Dustin Meyer, only mentions the technology as an afterthought, underscoring that it isn’t viable yet. After a long section highlighting the benefits of switching from coal to natural gas for power generation, he writes, “In the future ... new technologies like CCUS can offer additional opportunities to reduce emissions.” The American Petroleum Institute declined to comment for this story.
Southern Company, which owns gas and electric utilities across six states, submitted extensive comments to the EPA arguing that carbon capture was “many years away.” The company manages and operates the National Carbon Capture Center, where it conducts research on the technology. Its climate plan suggests that some 21% of its electricity generation will come from natural gas plants with carbon capture by 2050. And it’s in the process of conducting an engineering study to install the technology on one of its natural gas plants in Alabama.
But carbon capture isn’t ready for commercial deployment, Southern writes, using an example that’s often cited by critics of the technology — Petra Nova. Petra Nova is a carbon capture project at a coal-fired power plant in Texas that was mothballed in 2020 when it lost buyers for the captured carbon. While it operated, it experienced frequent outages and failed to capture the amount of carbon it was designed to. Its failure, Southern writes, illustrates that more research is needed to reduce the cost of carbon capture and improve reliability and performance, “which are critical when facilities are required to meet regulatory emission limits.”
Meanwhile, some of the loudest proponents of carbon capture in the upcoming EPA regulations have been environmental groups like the Natural Resources Defense Council, Evergreen Action, and the Clean Air Task Force. This isn’t exactly surprising. These groups, in particular, have historically been supportive of carbon capture technology.
“Industry has been touting the promise of carbon capture and storage for decades,” Lynch of the Natural Resources Defense Council told me. “It hasn’t been widely deployed on power plants because there currently aren’t any federal restrictions on the amount of carbon pollution that power plants can emit.”
Jay Duffy, litigation director at Clean Air Task Force, said the industry’s claims are unfounded. He cited studies by the Department of Energy’s National Energy Technology Laboratory which show that carbon capture is economical, when considering the new tax credits in the Inflation Reduction Act. There are already 13 vendors offering the technology for gas-fired power plants, he said.
Moving forward, some of carbon capture’s biggest critics might find that they need to support a carbon capture-based standard. The Center for Biological Diversity submitted comments to the EPA criticizing the technology, but did not suggest an alternative basis for the rule. When I asked Jason Rylander, legal director for the organization’s Climate Law Institute, whether they would support a standard based on carbon capture, he didn’t say no.
“The big problem is that the existing fossil fuel fleet is essentially uncontrolled for climate pollution in the middle of a climate crisis,” he told me. “That has to stop.”
Rylander couldn’t say where his organization would come down on the rule without seeing it, but he said that if it was based on carbon capture, there would have to be “extremely strong guardrails to ensure the safety and performance of the equipment.” But he also acknowledged that the EPA’s increasingly tough regulatory environment for power plants, along with tax incentives for clean energy in the Inflation Reduction Act, could mean that very little carbon capture would ultimately get built.
“It may very well be that the majority of plants meet these standards by other means.”
This Halloween, get 20% off using code ADVANCED
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
The gains set up Democrats to potentially flip the utility commission in 2028.
The blue wave has officially reached the Arizona down ballot. Though two Democratic wins in the Arizona Corporation Commissioner race might not drum up the same national coverage as, say, flipping a Senate seat in South Carolina, the election of Clara Pratte and Jonathon Hill to the five-seat commission could have major energy implications in a state that already saw renewables champions take over the state’s largest utility earlier this year. (With close margins in slow-to-count Arizona, the ACC race wasn’t officially called until Thursday evening, when both Republicans conceded.)
Arizona is one of 10 states that elects its utility commissioners, with the ACC regulating private water, gas, and electric companies in the state. That includes overseeing Arizona Public Service and Tucson Electric Power, where bills have increased 52% and 10%, respectively, over the past five years, per Heatmap’s data. (The publicly owned Salt River Project, which serves much of the Phoenix area, operates largely without ACC oversight.)
The ACC has been wholly in Republican hands since 2024; during that time, the body repealed Arizona’s Electric Efficiency Standards, which had incentivized utilities to pursue energy efficiency programs, as well as the state’s Renewable Energy Standard and Tariff, which supported the build-out of solar and wind power. “They were a rubber stamp for all our utilities and refused to even consider anything in support of protecting our climate,” Arizona State Representative Brian Garcia, who was reelected on Tuesday, said during a press call with Lead Locally this week. “At one instant, one of the commissioners told someone who got sick from the heat — who turned off their power and their AC — ‘Well, that’s on them.’ And I think our state and our communities have had enough of that.”
Though the ACC remains under Republican control despite the two Democratic additions, it puts full control within a one-seat striking distance for progressives when the other three seats are up in 2028 — a much easier fight to win, and potentially a huge one, given that the party hasn’t controlled the ACC since 1997.
Of particular concern in 2026, though, was the development of data centers. Ralph Heap, a Republican in the race who made the League of Conservation Voters’ 12-person “worst of the worst” list out of all 6,342 seats up for grabs nationwide on Tuesday, previously told the Arizona Capitol Times he supports the data center build-out in the name of American AI dominance. Incumbent Republican Kevin Thompson, meanwhile, has argued that the commission “has done its job of shielding ratepayers from costs associated with servicing data centers and other large load users.”
Voters evidently disagreed, backing Hill and Pratte, who say they support a data center moratorium. “The Corporation Commission might not be able to implement a pause, but I think they can certainly be a clearinghouse for information,” Hill told Yellow Sheet Report, an Arizona political tipsheet, acknowledging the relatively limited role the ACC actually has in regulating data centers beyond demanding transparency of utilities’ energy service agreements.
There are other concerns, too. Climate organizers zeroed in on the ACC race because of its influence over the solar buildout in the nation’s sunniest state, where nevertheless six of the state’s 15 counties have a restrictive ordinance against the resource, Heatmap Pro data shows. Commissioner-elect Pratte, a member of the Navajo Nation and the first Indigenous person elected to statewide office in Arizona, is also the co-founder of Navajo Power, a clean-energy company that helps tribal nations develop solar energy and storage projects.
Arizona Public Service and Tucson Electric Power also both have pending rate increase requests under review by the ACC; a 14% rate increase for residential customers and a 45% or more increase for data centers in the case of APS, and a 10% increase for residential customers in the case of TEP. (The APS’ rate case will likely be decided in December, before Pratte and Hill take their seats.)
Additionally, State Senator Lauren Kuby has introduced a bill to change the name of the ACC to the Arizona Public Utility Commission, a move intended to highlight to voters “its significance to their daily lives,” as she told the Arizona Capitol Times earlier this year. Sure enough, John Qua, the campaign director at Lead Locally, and Caroline Spears, the executive director of Climate Cabinet, previously told my colleague Matthew Zeitlin that part of the trouble with supporting progressive candidates in the ACC race was communicating to Arizona voters that, like the race for governor, it is a partisan election.
But given how things turned out Tuesday nationwide — a referendum on cost-of-living and, perhaps, data centers — it seems they needn’t have worried. Arizonans worked out exactly who to blame.
Electricity companies look like one of the biggest losers of the 2026 midterms.
This is Heatmap Daily, a weekday digest written by our executive editor. Subscribe here.
I’m still wrapping my head around the size and scale of the Democratic victory on Tuesday. I suspect Wall Street is, too. Yesterday, the S&P 500 gained about 1.6% as investors saw an upside in the Democratic blow-out. Today, they lost their nerve: The S&P fell almost 4.4%, and the tech-focused Nasdaq slid by more than 5%. That AI-loaded index is now down more than 10% from its all-time high in October, which means it’s technically entered a “correction.” (If it drops by 20%, it’ll be in a bear market.)
Amid the market carnage, utilities have held out alright. The Vanguard utilities index fell by less than one percent today, and two of the country’s biggest vertically integrated electricity monopolies — Duke and Southern Company — actually gained ground. Other power companies — including Xcel Energy, which serves the Midwest and Dominion Energy in the Southeast — did okay as well.
I find that surprising, because utilities strike me as one of the biggest losers of Tuesday’s election.
That’s partly because utilities showed up in surprisingly specific ways in candidate policy proposals this cycle. Last night, I wrote about how Senate Democratic candidates took a fairly moderate tack on climate and energy policy this year. What I didn’t mention is that Adam Hamilton, Kansas’ newly elected Democratic senator, called out utilities specifically in his proposal for major new transmission. One of his four big energy policy proposals is as follows:
Require competitive bidding processes for transmission projects instead of handing utility companies lucrative contracts at taxpayer expense. When a nearly half-billion-dollar transmission project is handed to a single utility with no competitive bidding, Kansas ratepayers can end up paying far more than they should. Competitive bidding has been shown to cut these costs by twenty to thirty percent. Politicians on both sides of the aisle should speak out against harmful policies that avoid competitive bidding, like the $493 million project that was handed to Evergy.
I mean, sounds great to me, but transmission policy does not normally rank among Democrats’ biggest applause lines. Hamilton’s other energy ideas are far more conventional, including ending Trump’s tariffs, his war on domestic energy projects, and restoring the clean energy tax credits.
Hamilton wasn’t alone in targeting utilities. David Pomerantz, who leads the watchdogging Energy and Policy Institute, has a great blog post today looking at utility politics in the 2026 election. He argues that we’re about to see utilities endure a much tougher oversight regime than they’ve faced in decades.
Why? There was much more attention on public utility regulators in this election than there have been in previous ones, he argues. Historically, public utility commission appointments have been sleepy affairs. But “incoming new governors Amy Acton (Ohio), Jocelyn Benson (Michigan), David Crowley (Wisconsin), Aaron Ford (Nevada), and Hannah Pingree (Maine) all campaigned overtly on a promise to appoint commissioners who would put ratepayers first,” he writes. In a few of those gubernatorial races, the losing Republican candidate had also promised to fire or replace the existing utility commissioners.
It goes beyond just oversight. The incoming governors in Pennsylvania, Iowa, and Maine have all vowed to reform or lower utility profits. Democrats won a majority on Georgia’s public utility commission — and flipped two seats in Arizona’s five-person board — promising to look closely at the utility profit structure, too.
In one state, voters even directly intervened to limit utility action. Michigan’s Proposition 2, which bars regulated utilities from making campaign contributions, passed overwhelmingly with more than 80% of the vote (although it now faces a legal challenge). And more than 100 politicians, including the winning Benson, pledged not to take utility campaign contributions.
Anyway, it’s an interesting post. You might remember I spoke to David last week for Shift Key about how the bipartisan permitting legislation would weaken monopoly utilities. As my colleagues Jael Holzman and Emily Pontecorvo wrote yesterday, Democrats and Republicans are now negotiating a top-down amendment to that permitting package. We’ll soon learn if the new version — which could come out any time in the next two weeks — preserves the same tough-on-utilities provisions that Dave praised.
When it comes to energy and data centers, everyone loves Texas. Its pro-business political consensus, unusually deregulated electricity market, wide-open plains, sunny skies, and large natural gas and oil deposits have attracted data center developers, renewables developers, liquefied natural gas export terminals, and battery storage entrepreneurs alike.
But this all happened under decades of unified Republican control of Texas’ government. That’s ending on January 19, when Gina Hinojosa is sworn in as governor alongside every other holder of statewide elected office who won this year. In Austin, they will join a Democratic majority Texas House of Representatives, which has been under Republican control since 2003.
Immediately following the election, stocks linked to data center development in Texas swooned — Elon Musk’s SpaceX is down 12.5% since Tuesday, data center developer CoreWeave is down almost 19%, Oracle is down 9%, Texas-based independent power producer Vistra is down 19%. Sterling Infrastructure, a civil construction company headquartered outside Houston, has seen its shares fall 32%.
On the campaign trail, Hinojosa called for a moratorium on data centers until the legislature could pass legislation putting guardrails around development, including protecting residential ratepayers from electricity price hikes and giving local communities more leeway to restrict and condition development. Two weeks before election day, she released a video criticizing Governor Greg Abbott’s “Batch Zero” review process — which had been broadly characterized as a “pause” when it was announced over the summer — for allowing new permits, and she said that she would issue a “ban” on all data center approvals until new laws could be passed.
When Abbott introduced his pause over the summer, Texas’s electricity market ERCOT had 474 gigawatts of data center interconnection requests in its queue (almost all from data centers), a figure he said was around five times the electricity market’s peak demand. That review is due to end next month, shortly before Hinojosa is due to take office, leaving little time for new projects to get approved before the moratorium goes into effect.
Some observers and investors took a sanguine view of Hinojosa’s data center policies. Gavin Baker, a longtime investor in SpaceX, said on X that Hinojosa’s policies “sound reasonable” and pointed to an interview she gave saying that the moratorium would be on new permits and would not affect the pipeline of permitted projects.
The data center and energy industry, however, is in wait-and-see mode when it comes to the severity of the moratorium.
“If she was thinking of trying to go after projects that had begun the construction process,” Brandt Vermillion, U.S. research lead at Modo Energy, said, “I think it would change the overall outlook a ton.”
According to Modo Energy analysis, there are some 25 gigawatts worth of projects under construction in Texas, another 4.6 gigawatts permitted, and another 90 gigawatts that are either just announced or have only submitted grid studies. If Hinojosa “is only going after non-permitted projects,” Vermillion added, then anyone thinking about the future path of data center development in Texas should be more concerned about supply chain constraints like obtaining enough chips to power the data centers.
That being said, the Texas legislature’s session doesn’t end until May 2027, meaning that Hinojosa’s pause could last several months before lawmakers put guardrails into law.
“I don’t think we’re going to not build another data center in the state,” Joshua Rhodes, a research scientist at the University of Texas at Austin, told me. “But I think that they’re going to be under quite a bit more scrutiny.”
That being said, analysts are now much more uncertain about the future path of electricity demand in the state. “Texas demand is difficult to project after Gina Hinojosa’s surprise win,” Jefferies analyst Julien Dumoulin-Smith wrote in a note to clients on Thursday.
That means more trouble for developers in Texas, especially for storage projects, which had already been seeing extremely volatile monthly revenue.
“Batteries and energy storage have been counting on demand to go up because they’re having a rough time out there right now in terms of revenues,” Rhodes said. “Demand will have a pretty big impact on supply.”
One thing the battery storage industry, as well as solar and wind developers, can cheer is that Democratic control of the governorship and the state House means that the threat of anti-renewables bills has fallen to essentially zero.
The renewables industry is hoping that data center development does continue in Texas, but that it looks more orderly and grid-connected.
Going forward, Vermillion expects that data center developers will have a harder time getting tax abatements, which means that a “well-capitalized hyperscaler” could potentially still pursue projects.
“Project A that was going to go about development in a certain way of seeking tax abatements and buying a bunch of reciprocating engines and trying to run themselves off grid” is much less likely to be able to go forward in Hinojosa’s Texas, Vermillion told me, especially as she is able to appoint new commissioners to the Texas Public Utility Commission or the Texas Commission on Environmental Quality.
Tim Woodruff, the data center lead at Modo, told me similarly. “In the near term, if you're one of the neo clouds, maybe now you start pushing a little harder on your projects that you have in MISO or in CAISO,” he said.