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South Dakotans successfully fought back against a law that would have made it easier to permit and build.

South Dakota voters have rejected a ballot measure that would have eased the permitting process for a highly contentious carbon dioxide pipeline. The planned $8 billion project, developed by Summit Carbon Solutions, would carry CO2 captured from ethanol plants to sequestration wells in neighboring North Dakota. But if the company had been banking on legislative relief for its siting challenges, it will have to figure out a new plan to move forward.
Referred Law 21, as the measure was called, was a citizen-led veto referendum on a bill that passed the South Dakota legislature and was signed by the governor in March. The bill would have preempted all local land use regulations and ordinances related to the siting of carbon dioxide pipelines and other transmission infrastructure, including power lines. Full authority to permit these projects would have been handed to the state’s utility commission, an elected three-member body that regulates utilities.
Summit Carbon Solutions is trying to build what would be the largest pipeline designed to carry carbon dioxide in the United States. From a climate perspective, putting debates on land use and local control aside, the calculus of the project is complicated.
Ethanol refineries are ripe for carbon capture — they emit a very pure stream of CO2 that is technologically easy to capture, and it’s better that it be buried underground than dumped in the atmosphere. But the long term prospects for ethanol in a low-carbon future are murky at best, and investing $8 billion in carbon capture and pipeline infrastructure could help justify its continued use over other, potentially better solutions. Though it’s clear electric cars will eventually crowd out ethanol from the passenger vehicle fuel market, some advocate for the industry to pivot to aviation fuel.
The pipeline faces opposition throughout the Midwest from a diverse coalition of stakeholders, including landowners in the pipeline’s path, environmental groups like the Sierra Club that oppose carbon capture in general, and Republican legislators who question the project’s merits on the grounds that climate change is merely a “hypothesis.” Though CO2 pipelines generally have a good track record for safety, a high-profile rupture in Mississippi in 2020, which sent 45 people to the hospital, has also amplified concerns.
At least five municipalities in South Dakota have passed rules governing the siting of the pipeline, Chase Jensen, a senior organizer for the environmental nonprofit Dakota Rural Action told me on a call last week. For example, Minnehaha County, the home of Sioux Falls, adopted setback rules last year that require pipelines to be laid 330 feet away from residential areas, businesses, and churches. An ordinance in Lincoln County requires 1,855 feet, and prohibits construction on sites of historical or archeological significance.
“Everybody who's going to make a buck from the future energy transition is licking their chops at this,” Jensen said of Referred Law 21, which would have preempted these ordinances. “It's a lot easier to just make campaign donations to three public utility commissioners than the 300-plus county commissioners across the state.”
The bill signed into law in March was painted as a compromise. Though it weakened local control, it gave counties the ability to charge pipeline companies a tax of $1 per linear foot of pipe installed. It also included a so-called “Landowner Bill of Rights” that enshrined certain protections like ensuring the pipeline’s developer is liable for damages caused by the project, and designating a minimum depth at which the pipeline must be buried.
But Jensen and others who opposed argued it didn’t offer landowners anything new — some of its provisions are already afforded by South Dakota law, and others had already been negotiated with Summit Carbon Solutions. Jensen pointed out that the utility commission already has the ability to override local ordinances if it finds them to be overly restrictive.
Now, with control over pipeline siting back squarely in the hands of local authorities, the future of the Summit project in South Dakota is unclear. The utility commission already rejected the company’s initial application for construction permits last year; Summit has since altered its route and reapplied.
Martin Lockman, a climate law fellow at Columbia Law School, told me it was difficult to take away a clear message from the fight, in part because CO2 pipelines have strange politics. Coalitions for and against them don’t break down over party lines or traditional groups like environmentalists versus fossil fuel companies. Some climate advocates, as well as experts in the U.S. Department of Energy, say we’ll need to build many thousands of miles of new carbon pipelines in order to help us sequester carbon captured from industrial facilities and from the atmosphere.
The specific arguments over the Summit project may not apply to projects proposed elsewhere, Lockman told me, but its fate could still have ripple effects. “Any kind of high profile failure might make investors a little bit more leery to participate in this kind of project,” he said.
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The additional clean capacity would represent nearly 3% of North America’s existing total.
North America has about 37.5 gigawatts of total virtual power plant capacity, according to energy consultancy Wood Mackenzie’s latest estimate, published last year. That capacity is spread across roughly 2,000 VPPs, which aggregate distributed energy resources like batteries, smart thermostats, and heat pumps to cut, shift, or supply electricity when the grid is under strain — effectively turning them into a single, coordinated power plant.
On Thursday, Google and VPP operator Voltus announced plans to add another 1 gigawatt of clean capacity over the next three or four years — or nearly 3% of North America’s existing total. Under Voltus’ “bring your own capacity” model, Google will fund the VPP to help meet its booming data center power needs, while Voltus will enroll businesses and households across the PJM Interconnection, the notoriously overstrained grid region spanning parts of the Midwest and Mid-Atlantic, compensating them for their participation either directly or through electricity bill credits.
The announcement expands on a three-year, 100-megawatt deal the two companies signed in June, extending their commitment through 2040. Voltus CEO Dana Guernsey told me that the smaller deal gave the companies a starting point for a much more ambitious partnership. “It’s a lot easier to explain to people how you’re going to 10x if you’ve already 1x, and so we had to start somewhere,” she said. “We always had our eyes set on bigger things.”
Earlier this month, Voltus closed an oversubscribed $225 million Series D round led by Generation Investment Management to scale its VPP portfolio to 20 gigawatts by 2030. The first phase of the Google partnership is also oversubscribed, Guernsey told me. While that flexible power won’t come online until next year, this means Voltus has already lined up over 100 megawatts of accredited capacity that PJM can count on to deliver when needed, much as it would a natural gas plant or solar-plus-storage installation.
In the meantime, the VPP operator says its broader PJM portfolio has already demonstrated what it can do. Last week, an unseasonably warm stretch of fall weather required PJM to activate its Emergency Load Response Program twice. With 46 gigawatts of generation offline for planned maintenance or construction and another 15 gigawatts unexpectedly unavailable, “distributed resources came through,” Guernsey posted on LinkedIn. “This is how a modern grid should work.” Based on preliminary data, she told me that Voltus delivered about 105% of its committed load reduction during the events.
And VPPs can do more than help avert emergencies. Grid operators are increasingly calling on distributed resources for routine grid management too, such as to ease daily price spikes, reduce emissions when the sun or wind isn’t available, or relieve congestion on a local line. “It’s nearly constant. I think soon we’ll be able to say it’s like every hour,” Guernsey told me.
So far this year, Voltus has reduced electricity demand in PJM by more than 200 gigawatt-hours. Now the company plans to lean more heavily on batteries, particularly at commercial and industrial sites, to accelerate its growth. Guernsey told me that with battery costs falling, electricity prices rising, and fixed payments to participants through 2040, the math now works to deploy batteries at scale, without exposure to unpredictable wholesale electricity prices.
She’s betting that other hyperscalers will see the value in large-scale battery deployments too. Most of the buzz today has revolved around hyperscalers bringing their own generation online — both to secure power faster and head off community opposition by paying their own way. Thus far, Google is the only hyperscaler committed to bringing its own distributed capacity through a VPP. But getting the big players to embrace these new “bring your own capacity” contracts, which Voltus launched last September, is central to its growth strategy.
Guernsey has likened these novel capacity contracts to the corporate renewable power purchase agreements that Google also helped pioneer in the early 2010s. Now she sees a similar opportunity for VPPs to move from a promising concept to a mainstream procurement tool.
“There’s been this notion that we’re coming up on an inflection point for a very long time,” she said of the VPP market. “And I want to be able to say we came up on the inflection point, we went past it, and now we are scaling. And this is an awesome proof point.”
The Federal Reserve raised the federal funds rate by a quarter point, the central bank announced Wednesday afternoon, its first rate change since Chairman Kevin Warsh took his seat in May and its first rate hike in over three years.
The federal funds rate will now sit between 3.75% and 4%. According to projections by regional Federal Reserve presidents and members of the Board of Governors, the central bank expects to hike rates one more time this year.
In its now characteristically brief statements, the Federal Open Market Committee said that the hike “will support a timelier return to the Committee's 2 percent goal” for inflation. Inflation is currently running at 3.4% and has been above the Fed’s 2% target since 2021.
The FOMC’s (brief) statement explaining the hike pointed to “resilient” domestic spending and “robust” capital investment. It characterized the economy as “expanding at a solid pace,” albeit with “elevated” uncertainty due to “geopolitical developments.”
This combination of factors — high oil prices due to the partial shutdown of the Strait of Hormuz and high investment in data centers — have helped push up yields on Treasury bonds, which helped maneuver the Federal Reserve into its rate hike. These rising Treasury yields have made raising capital more difficult for sectors besides artificial intelligence, very much including the capital-intensive renewable and clean energy industries.
Warsh attributed higher Treasury yields to “economic strength, competition for capital, and geopolitics,” in his press conference following the rate announcement. The yield on the 10-year treasury bond, often used as a benchmark for the cost of money throughout the economy, rose to over 5% on the news, the highest level since 2007.
The August Electricity Price Hub data is in.
It’s another hot and expensive summer.
Across the country, average household electricity bills are up 2.7% in the first eight months of the year, according to the latest update to Heatmap and MIT’s Electricity Price Hub, tacking on $4 per month to the typical bill. This level of rise is consistent with the pace set in 2024 and 2025, but faster than 2021 and 2023.
As we’ve discussed before, some of the fastest growth in prices comes either in the Atlantic Seaboard — with Washington, D.C., Virginia, and New Jersey all having year over year growth rates of at least 7.5% — thanks largely to increased demand and capacity payments in the PJM Interconnection marketplace. Another standout so far this year is Hawaii, which is uniquely dependent on imported oil to power its grid and has seen its 12-month trailing average prices rise by over 8% so far this year.
California, which is well known for seeing especially sharp price increases in recent years largely due to wildfire-related costs, has seen somewhat restrained bill growth so far this year across the state, with the 12-month-rolling average bill rising just 3% in the past 12 months and prices going up 4%. (That price level is still quite high, however, at almost 32 cents per kilowatt-hour, compared to a national average of around 19.)
Rates charged by Southern California Edison, one of the state’s big three investor-owned utilities, are up almost 15% in the past year, averaged across its baseline regions. The MIT researchers attribute this increase to two major factors: one, a decrease in the California Climate Credit, which is paid out to electricity customers from the state’s emissions cap-and-invest program. This year, the credit for Southern California Edison ratepayers is $72, applied to bills in July and August in tranches of $36. Last year, by contrast, Southern California Edison handed out $112 in two tranches, April and October.
The second factor in Southern California Edison’s inflated bills is an increase in the fixed charge portion of the bills ratepayers receive. Following changes in California state law designed to distribute the cost of the grid more equitably, SCE revamped its rate structure at the end of last year to include a “Base Services Charge” of $24 per month for customers not enrolled in any special rate program. At the same time, SCE instituted a roughly 10% decrease in its per-kilowatt-hour electricity rate in order to protect lower-income ratepayers (who would pay a fixed charge substantially lower than the baseline $24). PG&E moved to a similar system earlier this year.
When it introduced the new rates in November of last year, SCE said that “medium energy users” would likely see little change in their bills. Price Hub data suggests, however, that the typical household has seen a bill increase from the new service charge of 13%, even before accounting for the smaller climate credit.