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Talking to legislators from New York, Washington, Massachusetts, and New Jersey about what’s under threat, what’s safe, and the strain of it all.
State lawmakers around the country are negotiating budgets for the coming year amid unprecedented uncertainty. Any decisions they make now about how to spend state money may need to be revisited after Congress finishes its budget reconciliation bill, which could hollow out Medicaid, the largest pot of federal funds that most states receive.
On the climate and clean energy front, the Trump administration has been trying to claw back money allocated to states for electric vehicle charging, home energy retrofits, electric school buses, utility bill assistance, and more. Even longstanding tax credits that states rely on to transition to renewable energy are at risk. On top of all this, the president has threatened to sic his attorney general on states with ambitious climate policies.
I wanted to know how all of this was affecting the way the most forward-thinking state leaders on climate were contemplating their next steps. States passed some of their most ambitious policies to fight climate change during Donald Trump’s first term as president, and they are the best chance the U.S. has to continue making progress over the next four years. But if last time the administration was throwing sand in the gears of climate action, this time it’s trying to tear up the road entirely.
After talking to state senators and representatives in Washington, Massachusetts, New York, and New Jersey, it was clear that every faced its own unique set of considerations and challenges, but there were a few recurring themes.
“We’re in this weird no-man’s land,” New York State Senator Liz Krueger told me. Between losing access to funds the state was relying on and uncertainty around how the Trump administration will reshape environmental protection and clean energy tax credits, “the agenda we might have set out for ourselves a year ago does not necessarily jive with the reality we must now confront.”
Krueger was frustrated because New York has been in the process of developing a new revenue-raiser to help pay for climate programs called Cap-and-Invest, but it’s behind schedule. Eventually it will place a cap on carbon emissions from major polluters and charge them fees when they surpass it — but draft rules for the program are more than a year overdue. Governor Kathy Hochul has not said when her administration will get them out, and environmental groups are now suing the state for putting its climate targets at risk.
The delay has been “quite aggravating,” Krueger told me. But at the same time, she’s worried that if and when the regulations are out, the Trump administration will try to shut down the program. Trump signed an executive order in early April directing his attorney general to identify and “stop the enforcement” of state climate programs that “are or may be unconstitutional.” The order specifically called out California’s carbon cap and trade program, which is similar to the one New York is developing.
“I don’t think we should stop moving forward as planned. But I think hanging over us is the concern that the feds will try to stop us,” Krueger said. She hasn’t sensed much appetite in the legislature to propose new climate programs this session, but she said she’s still hoping to get through a bill that she’s sponsored for the past few years requiring utility regulators to develop a strategy to transition buildings away from using natural gas for heating — although again, she wondered aloud if Trump would quickly try to shut it down.
Washington State, on the other hand, already has a cap-and-invest program in place. Representative Joe Fitzgibbon, of Seattle was the most optimistic of the state legislators I spoke to. “Our legal framework for fighting climate change was not predicated on federal dollars,” he told me. Last year, the state spent nearly half a billion dollars raised through that program on a wide range of projects to enhance wildfire prevention, improve energy efficiency in schools and homes, install electric vehicle chargers, and electrify buildings and vehicles. “We’re not backing off on any of our policies or any of our targets,” he said.
Fitzgibbon was unconcerned about the executive order. Legal experts are skeptical that the courts would side with the White House in any challenges to state climate laws. Trump also went after California’s cap and trade law during his first term and lost. “We think it’s bluster. We think it’s him trying to get headlines, and we’re just not inclined to fan the flames,” he told me.
Instead, Fitzgibbon is pushing forward with a bill this session to strengthen the state’s clean fuel standard. Current law requires a 20% reduction in greenhouse gas emissions from on-road transportation by 2034, and his amendment would increase that to between 45% and 55% by 2038.
New York is also behind on its goal to procure 9 gigawatts of offshore wind by 2035. The state only has power purchase agreements with three offshore wind farms — the small South Fork project, which is already operating, and two larger ones under construction — for a total of 1.8 gigawatts. Then shortly after Krueger and I spoke, the Trump administration issued a stop work order on one of those bigger projects, Empire Wind. Since Trump has also paused federal permitting for new offshore wind projects, Krueger wasn’t sure whether New York officials would even try to solicit for additional contracts. “There’s no good answers,” she said, with a sigh.
Offshore wind is a major element of New Jersey’s plans to cut emissions, as well. But the Trump administration recently pulled the permits for the Atlantic Shores wind farm, the only project serving New Jersey that had said permits.
State Senator Andrew Zwicker told me the sector was already struggling due to rising costs, supply chain issues, and local opposition. Even before Trump came into office, he said, he’s had to fight to keep renewable energy on the agenda. “There is a narrative that we can’t afford renewables, and that the way to go is you need resiliency and redundancy. And the only way to do that is, in our case, with natural gas,” Zwicker told me. He hears that story from Republicans — but also, increasingly, from Democrats. “That’s being driven by the cost of electricity more than it’s being driven by an executive order from Trump,” he added.
There is one source of funding for climate action that all states have access to that may be more impervious to federal interference. This came up during my call with Michael Barrett, a State Senator in Massachusetts, who asserted that “most of our climate policies don’t require budgeting.” That’s because the legislature has designed many of the state’s clean energy programs — including the buildout of electric vehicle infrastructure, rebates for heat pumps and energy efficiency, and compliance with the state’s renewable energy standard — to be funded by fees on monthly electric and gas bills.
Massachusetts is still really early in its legislative calendar — it operates on a two-year schedule and has barely started holding hearings for bills — but Barrett said there are some strategic shifts the state should make in light of Trump’s actions. For example, Trump has stymied offshore wind development, but Barrett said there was less the president could do to hurt solar. “So if you want to preserve the state’s industrial clean energy capacity,” he said, “you pivot to both behind the meter and in front of the meter solar on the ground, on the roofs, on canopies.” He also advocated for more subsidies for EV charging infrastructure rather than for electric vehicles themselves. “You forgo subsidizing individual drivers,” he said. “Many of them will purchase EVs anyhow, because they can afford to, and you focus on getting the charging infrastructure into the ground.”
All of the other state legislators I surveyed for this piece have similar programs financed through utility bills. In general, utility regulation is an area where state leaders have significant sway. In New Jersey, for example, Senator Zwicker is working on a bill that would require utilities to invest in “grid enhancing technologies,” equipment that enables power lines to transmit more electricity without having to totally replace the line or build a new one. That could go a long way to bringing more renewable energy online in the future. In New York, Krueger’s big priority for this year is to pass her New York Heat Act, which would significantly change how gas utilities are regulated, prioritizing transitioning away from gas to electric heating, and cutting the subsidies that customers pay to expand the gas system.
Though Barrett saw the ability for states to tack the cost of clean energy onto utility bills as reassuring, Zwicker found it concerning. “Every year, I personally have gotten more and more uncomfortable with putting everything on the backs of ratepayers,” he told me. “And we don’t have another model in place right now, so there’s no way to do anything else.”
New Jersey is facing many of the same challenges as New York and Massachusetts. The state’s economy has also taken a downturn, Zwicker told me, and budgets are tight. Governor Phil Murphy has proposed cuts to many areas, including climate spending. Zwicker said one of his big focuses right now is finding money to help low-income customers pay their utility bills, as the Trump administration is attempting to zero out federal funding for a longstanding energy assistance program.
New Jersey does have some money coming in for clean energy through utility bill fees, and it also funds climate action with proceeds from the Regional Greenhouse Gas Initiative, a program that charges power plant operators for their emissions. (Massachusetts and New York participate as well.)
But Zwicker was deeply concerned about the loss of federal funding and support. “New Jersey just can’t afford to do this by itself,” he told me. Electricity costs there are already among the highest in the country. “This is a national emergency, and the federal government has got to be a strong partner. Regardless of the fight over how we’re producing energy, if we can’t transmit it, if we don’t have a robust grid, that is as basic an infrastructure as is a highway or a bridge. Under this administration, it’s far from clear that they’ll put a penny towards anything around energy, period.”
Even Washington is not quite sitting pretty. Like New Jersey, the state is in a “pretty severe budget crisis,” Fitzgibbon said, and not in a position to backfill lost federal dollars. Its economy has taken a downturn after a post-pandemic spike. One thing the legislature is doing in response is re-allocating money in the budget that in the past had been set aside for technical assistance to help households, businesses, and Tribes apply for government grants — since federal dollars will likely be scarce, anyway. While the state can still make progress with its cap and invest funds, which can’t be re-allocated to other budget lines, grant funding from the Inflation Reduction Act would help the state cut emissions faster and more cost-effectively, he said. Washington was in line to get $71 million for electric vehicle charging and $21 million for truck charging, for example, but the Trump administration is trying to claw back that funding.
At the end of my interviews, I asked lawmakers what they wanted people to know about what it’s like to do their jobs right now. Zwicker emphasized the sheer scale of the challenge of putting together a budget — especially one that advances climate action — under these circumstances. “Being part of a committee to put a budget together is always a challenge,” he said, “but when you add the threat of over a billion dollars of cuts to our school children, up to $10 billion to $14 billion of cuts for healthcare for seniors and the poor, and then you say, we need to continue to push on New Jersey’s clean energy goals, and get ourselves off of our addiction to fossil fuels, it’s an incredibly challenging task.”
Barrett wanted to make it clear that climate progress would continue under Trump. He said that even if Medicaid was gutted, the state’s efforts to cut emissions would suffer less than local public education — again, because so much of it is financed and implemented through utility regulation. “He can do a great deal of harm, but he cannot kill the resistance to climate change,” Barrett said of Trump. “We would have to play catch up in a big way after he left, but I suspect that we’re going to have to play catch up anyway.”
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Tax credit transferability is a wonky concept, but it’s been a superpower for clean energy developers.
One of the most powerful innovations in the Inflation Reduction Act was a new vehicle to finance clean energy projects. In addition to expanding the nation’s tax credits for climate-friendly projects, Congress gave developers freedom to sell these credits for cash. If a battery factory couldn’t take full advantage of the tax credits itself, it could transfer them to someone else who could.
Now, Republicans on the House Ways and Means Committee have proposed getting rid of this “transferability” provision as part of a larger overhaul of the tax credits. A draft bill published on Monday would end the practice starting in 2028.
Nixing transferability isn’t the bill’s most damaging blow to clean energy — new sourcing requirements for the tax credits and deadlines that block early-stage projects pose a bigger threat. But the ripple effects from the change would permeate all aspects of the clean energy economy. At a minimum, it would make energy more expensive by making the tax credits harder to monetize. It would also all but shut nuclear plants out of the subsidies altogether.
Prior to the passage of the Inflation Reduction Act, if renewable energy developers with low tax liability wanted to monetize existing tax credits, they had to seek partnerships with tax equity investors. The investor, usually a major bank, would provide upfront capital for a project in exchange for partial ownership and a claim to its tax benefits. These were complicated deals that involved extensive legal review and the formation of new limited liability corporations, and therefore weren’t a viable option for smaller projects like community solar farms.
When the 2022 climate law introduced transferability across all the clean energy tax credits, it simplified project finance and channeled new capital into the clean energy economy. Suddenly, developers for all kinds of clean energy projects could simply sell their tax credits for cash on the open market to anyone that wanted to buy them, without ceding any ownership. The tax credit marketplace Crux estimated that a total of $30 billion in transfers took place last year, only about 30% of which were traditional tax equity deals. In the past, tax equity transfers have topped out at around $20 billion per year.
Schneider Electric, which has long helped corporate clients make power purchase agreements, now facilitates tax credit transfers, as well. The company recently announced that it had closed 18 deals worth $1.7 billion in tax credit transfers since late 2023. The buyers were all new to the market — none had directly financed clean energy before the IRA, Erin Decker, the senior director of renewable energy and carbon advisory services, told me.
It turns out, buying clean energy tax credits is a win-win for brands with sustainability commitments, which can reduce their tax liability while also helping to reduce emissions. Some companies have even used the savings they got through the tax credits to fund decarbonization efforts within their own operations, Decker said.
By simplifying project finance, and creating more competition for tax credit sales, transferability also made developing renewable energy projects cheaper. Developers of wind and solar farms have been able to secure upwards of 95 cents on the dollar for transferred tax credits, compared to just 85 to 90 cents for tax equity transactions. The savings go directly to utility customers.
“State regulators require electric companies to pass the benefits of tax credits through to customers in the form of lower rates,” the Edison Electric Institute wrote in a policy brief on the provision. “If transferability were repealed, electric companies once again would rely on big banks to invest in tax equity transactions, ultimately reducing the value of the credit that flows directly through to customers.”
Many of the companies that can’t count on tax equity deals will still have other options under the GOP proposal. Tax-exempt entities, like rural electric cooperatives and community solar nonprofits, can use “elective pay,” another IRA innovation that allows them to claim the credits as a direct cash payment from the IRS. For-profit companies developing carbon capture and advanced manufacturing projects also have the option to use elective pay for the first five years they operate. All of this raises questions about whether axing transferability would furnish the government with meaningful savings to offset Trump’s tax cuts.
But the bigger danger for Trump would be his nuclear agenda. Prior to the IRA, low power prices meant that many nuclear operators couldn’t afford to extend the licenses on their existing plants, even ones that had many years of useful life left in them. The IRA created a new tax credit for existing nuclear plants that made it economical for operators to invest in keeping these online, and even helped bring some, like the Palisades plant in Michigan, back from the dead.
This wouldn’t have worked without transferability, Benton Arnett, the senior director of markets and policy at the Nuclear Energy Institute, told me. Going forward, finding a tax equity partner would be nearly impossible because of the unique rules governing nuclear plants. Federal regulations require that the owners of a nuclear power plant be listed on its license, so bringing on a new owner means doing a license amendment — a headache-inducing process that banks simply don’t want to take on. “We’ve had members reach out to tax equity groups in the past and there was very little interest,” Arnett said
While a few plant owners might have enough tax appetite to benefit from credits directly, most have depreciating assets on their books that greatly reduce their liability. “Without transferability, for many of our members, it’s very difficult for them to actually monetize those credits,” said Arnett. “In a way, nuclear is disproportionately impacted by removing that ability to transfer.”
In February, Secretary of Energy Chris Wright declared that “the long-awaited American nuclear renaissance must launch during President Trump’s administration.” But so far on Trump’s watch, between the proposed loss of transferability and early phase-out of nuclear tax credits, plus cuts to loan programs at the Department of Energy, we’ve only seen policies that would kill the nuclear renaissance.
On Trump’s Gulf trip, budget negotiations, and a uranium mine
Current conditions: Highs in Dallas, San Antonio, and Austin could break 100 degrees Fahrenheit on Wednesday afternoon, with ERCOT anticipating demand could approach August 2023’s all-time high of 85,500 megawatts • Governor Tim Walz has called in the National Guard to respond to three fires in northern Minnesota that have burned 20,000 acres and are still 0% contained• The coldest place in the world right now is the South Pole of Antarctica, which could drop to -70 degrees tomorrow.
Win McNamee/Getty Images
The White House on Tuesday announced a $600 billion investment commitment from Saudi Arabia during President Trump’s trip to the Gulf. In exchange, the U.S. offered Riyadh “the largest defense cooperation agreement” Washington has ever made, with an arms package worth nearly $142 billion, Reuters reports. The deals announced so far by the White House total just $283 billion, although the administration told The New York Times that more would be forthcoming.
Among the known commitments in the health and tech sectors, the U.S. also reached a number of energy deals with Saudi Arabia’s state-owned oil company, Aramco, which agreed to a $3.4 billion expansion of the Motive refinery in Texas “to integrate chemicals production,” OilPrice.com reports. Aramco additionally signed “a memorandum of understanding with [the U.S. utility] Sempra to receive about 6.2 million tons per year of LNG.” (Aramco is responsible for over 4% of the planet’s CO2 emissions, according to the think tank InfluenceMap, and would be the fourth largest polluter after China, the U.S., and India, if it were its own country.) Additionally, Saudi company DataVolt committed to invest $20 billion in AI data centers and energy infrastructure in the U.S.
Senate Republicans are reportedly putting the brakes on the House Ways and Means Committee’s proposal to overhaul the nation’s clean energy tax credits and effectively kill the Inflation Reduction Act. “[S]ome Senate Republicans say abruptly cutting off credits and changing key provisions that help fund projects more quickly could stifle investments in energy technologies needed to meet growing power demand, and lead to job losses for manufacturing and electricity projects in their states and districts,” Politico reports. North Dakota’s Republican Senator John Hoeven, for one, characterized the Ways and Means’ plan as a “starting point,” with “some change” expected before agreement is reached.
As my colleague Emily Pontecorvo reported earlier this week, the House proposal “appears to amount to a back-door full repeal” of the IRA, including cutting the EV tax credit, moving up the phase-out of tech-neutral clean power, and eliminating credits for energy efficiency, heat pumps, and solar. But as she noted then, “there’s a lot that could change before we get to a final budget” — especially if Republican senators follow through on their words.
The Interior Department plans to expedite permitting for a uranium mine in Utah, conducting an environmental assessment that typically takes a year in just 14 days, The New York Times reports. Interior Secretary Doug Burgum said the fast-track addressed the “alarming energy emergency because of the prior administration’s Climate Extremist policies.” Notably, Burgum also recently issued a stop-work order on Equinor’s fully permitted Empire Wind offshore wind project, claiming the project’s permitting process had been rushed under former President Joe Biden. That process took nearly four years, according to BloomberNEF.
Critics of the Velvet-Wood project in San Juan County, Utah, said the Interior Department is leaving no opportunity for public comment, and that there are concerns about radioactive waste from the mining activities. Uranium is a fuel in nuclear power plants, and its extraction falls under President Trump’s recent executive order to address the so-called “national energy emergency.”
Clean energy investment saw a second quarterly decline at the start of 2025, but nevertheless accounted for 4.7% of total private investment in structures, equipment, and durable consumer goods in the first quarter of the year, a new report by the Rhodium Group’s Clean Investment Monitor found. Among some of its other notable findings:
You can read the full report here.
A Dutch environmental group is suing oil giant Shell, arguing that the company is in violation of a court order to make an “appropriate contribution” to the goals of the Paris Climate Agreement, France 24 reports. Amsterdam-based Milieudefensie previously won an historic precedent against Royal Dutch Shell in 2021, with the court ruling the company had to cut its carbon emissions by 45% of 2019 levels by 2030 because its investments in oil and gas were “endangering human rights and lives.” Shell appealed the decision, moved its headquarters to London, and dropped “Royal Dutch” from its name; subsequently, a Dutch appeals court sided with Shell and reversed the 45% emissions reduction target, while still insisting the company had a responsibility to lower its emissions, Inside Climate News reports.
Now, Milieudefensie is suing, claiming Shell is in breach of its obligation to reduce emissions due to its “continued investment in new oil and gas fields and its inadequate climate policy for the period 2030 to 2050.” Sjoukje van Oosterhout, a lead researcher on the Shell case for Milieudefensie, said in a press conference, “The impact of this case could really be enormous. Science is clear, crystal clear, and the ruling of the appeals court was also clear. Every new field is one too many. That’s why we have this case today.”
AstraZeneca
UK regulators this week approved the use of AstraZeneca’s new medical inhaler, which uses a propellant with 99.9% lower global warming potential than those currently in use. The U.S. Environmental Protection Agency has estimated that the discharge and leakage of planet-warming hydrofluoroalkane propellants from inhalers was responsible for 2.5 million metric tons of CO2 equivalents in 2020, or about the same emissions as 550,000 passenger vehicles driven for one year.
Tuesday’s encouraging inflation data concealed an ominous warning sign.
The Trump administration’s policy of increased natural gas exports abroad, plus increased industrial and artificial intelligence investment at home, plus cuts to green energy tax credits could add up to more energy price volatility for Americans.
On Monday, the House Ways and Means Committee unveiled its plan for deep cuts to the Inflation Reduction Act, including early expiration dates and restrictions on the core clean energy tax credits that would effectively gut America’s signature climate law.
But Tuesday’s good news about inflation also contained a troubling omen for electricity prices.
Overall, prices are rising at their slowest rate in years. The Bureau of Labor Statistics reported that overall prices have risen 2.3% in the past year, the slowest annual increase since February 2021. But electricity prices were up 0.8% just in the past month, and were up 3.6% over last year.
This is likely due in part to rising natural gas prices, as natural gas provides the better part of American electricity generation.
The benchmark Henry Hub spot price for natural gas was $3.26 per million British thermal unit last week,according to the latest Energy Information Administration data — around twice the price of a year ago. And there’s reason to think prices for both gas and electricity will continue to rise, or at least be vulnerable to spikes, explained Skanda Amarnath, the executive director of Employ America.
European demand for liquified natural gas has been high recently, which helps pull the American natural gas price closer to a global price, as Europe is a major buyer of U.S. LNG.
During the early years of the shale boom in the 2010s, before the United States had built much natural gas export capacity (the first LNG shipment from the continental United States left Louisiana in early 2016, believe it or not), American natural gas consumers benefited from “true natural gas abundance,” Amarnath told me. “We had this abundance of natural gas and no way for it to get out.”
Those days are now over. The Trump administration has been promoting LNG exports from day one to a gas-hungry global economy. “We’re not the only country that wants natural gas, and LNG always pays a premium,” Amarnath said.
In March, Western European gas imports hit their highest level since 2017, according to Bloomberg. And there’s reason to expect LNG exports will continue at that pace, or even pick up. One of the Trump administration’s first energy policy actions was to reverse the Biden-era pause on permitting new LNG terminals, and Secretary of Energy Chris Wright has issued a number of approvals and permits for new LNG export terminals since.
The EIA last week bumped up its forecast for natural gas prices for this year and next, citing both higher domestic natural gas demand and higher exports than initially expected. And those are in addition to all the structural factors in the United States pulling on electricity demand — and therefore natural gas demand — including the rise in data center development and the boom in new manufacturing.
But we’re in the era of “drill, baby, drill,” right? So all that new demand will be met with more supply? Not so fast.
Increased production of oil overseas — pushed for by Trump — is playing havoc with the economics of America’s oil and gas companies, which are starting tolevel off or even decrease production. The threat of an economic slowdown induced by Trump’s tariffs also influenced some of those decisions, though that fear may have eased with the U.S.-China trade deal announced on Monday.
While it’s the price of oil that largely determines investment decisions for these companies, a consequence can be fluctuations in natural gas production. That’s because much of America’s natural gas comes out of oil wells, so when oil wells go unexploited, natural gas stays in the ground, too.
“A drop in crude oil prices over the past three months has reduced our expectations for U.S. crude oil production growth, and we now expect less associated natural gas production than we did in January,” the EIA wrote last week.
“Together, these factors mean we expect natural gas prices will be higher in order to incentivize production and keep markets balanced.”
At the same time, Republicans in Congress and the Trump administration look to choke off policy support for a boom in renewables investment with their planned dismantling of the Inflation Reduction Act. This means a less diversified grid that will be more reliant on natural gas, Amarnath explained.
When natural gas prices spike, “it’s very useful to have non-gas sources of supply,” Amarnath told me. The alternative fuel can be anything as long as it’s not fossil. It can be solar, it can be wind, it can be nuclear — all three of which would be hammered by the IRA cuts.
What these sources of power do — besides reduce greenhouse gas emissions — is diversify the grid, so that America’s electricity consumers are “not held hostage to what Asian or European LNG buyers want to pay,” Amarnath said.
“The less you rely on a fuel source for electricity, the more stable you are from a price spike. And we’re more at risk now.”