|  | | Transition Finance Weekly |
| Exploring the policy, politics, and economics of the clean energy transition |
| Each week here in Transition Finance Weekly, researchers and analysts from Pleiades Strategy summarize the top stories and trends related to the policy, politics, and economics of the clean energy transition in the states.
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| 1. New $7.3B in USDA Funding Will Transform America’s Rural Energy Landscape |
| The Inflation Reduction Act’s New ERA program is the largest investment in rural electricity since the New Deal. Thursday, President Biden was in Wisconsin talking about renewable energy, as the USDA announced $7.3 billion in grants and loans to 16 rural electric co-ops to build new clean energy, lower costs, and reduce emissions. These projects are funded by the Empowering Rural America (New ERA) program, and are expected to spur $29 billion in investment to build more than 10 gigawatts of clean energy for rural communities in 23 states. The winning co-ops include Dairyland in western Wisconsin, where these investments are expected to drive electricity rates down 42% this decade. Dairyland, like most applicants, focused their sights on wind, solar, and storage working together to provide more affordable, reliable energy. This program as a whole has seen incredible demand across the nation, with 157 proposals representing 750 projects submitted to the competitive process. The Inflation Reduction Act is truly unlocking clean energy for cooperatives in a new way. Until now, co-ops were left behind in the clean energy transition: as nonprofit-owned utilities, they haven’t had access to clean energy tax credits. Thanks to another policy change in the IRA, today they both have access to clean energy tax credits, a downpayment through New ERA for clean energy, and new tools to support home and transportation electrification.
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| | 2. Texas Energy Fund Continues Attempt to Steer $5.4B Into Uneconomic Fossil Gas |
| Texas continues its attempt to force financing into uneconomically competitive fossil gas this week with the announcement of 17 new gas plants requesting taxpayer-subsidized loans. This week, the Texas PUC unveiled 17 projects in which developers have asked for $5.4 billion in taxpayer-backed, low-interest loans through the Texas Energy Fund, which was designed to help prop up the fossil fuel industry. Texas leaders’ massive fossil fuel subsidies and industry favoritism are aimed at keeping fossil fuels competitive with renewables as costs for wind, solar, and storage drop dramatically and the impacts of climate change become more costly. This week, the Texas Public Utilities Commission has moved forward on the approval of 17 new gas generation plants totaling 9,700 MW of power. If all are built, it would increase total ERCOT gas capacity by 14%. State leaders claim gas generation will prevent more failures like those during the 2021 Texas Freeze , but again and again, gas plants have failed more often in disruptive climate events. Project siting suggests other motivations for building new plants — one new Granbury project is co-sited near significant bitcoin mining, which has already endangered local health. The majority of fossil gas applications for Texas Energy Fund dollars are credited with originating during the joint conference held by anti-ESG proponent Lieutenant Governor Dan Patrick and BlackRock CEO Larry Fink in February that centered around the Texas Energy Fund, a meeting that signaled an “apparent détente” between the asset manager and Texas anti-ESG proponents. BlackRock has been targeted by Texas politicians, including Lt. Gov. Patrick, for their climate risk statements. The firm was put on a blacklist of financial firms in 2022 following the passage of SB13.
Even with the full support of pro-fossil fuel officials, it is hard to build uneconomical generation: one project as already fallen through, with NextEra stating that its name was added as a developer to a project without their consent.
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| | 3. Astroturfing against clean energy regular practice, as effort in Ohio demonstrates yet again |
| Oil and gas dark money funds “grassroots” anti-clean energy campaigns around the country. The fossil fuel industry doesn’t just promote its own products; it works behind the scenes to kill sustainable alternatives, too. Testimony before the Ohio PUC revealed last week that Knox Smart Development, a local group spreading misinformation about a 120 MW solar project in the Columbus exurbs, is actually funded by an oil and gas executive tied to dark-money clean energy opponents — including The Empowerment Alliance and ALEC. This is far from the first time fossil fuel advocates have stood up astroturfed opposition to environmentally friendly initiatives. A similar story played out last year in the Northeast: groups like “Protect Our Coast New Jersey” and “Save Our Beach View,” which fought offshore wind, turned out to be funded by dark money tied to fossil fuel-connected right-wing think tanks. The groups’ “experts” were interviewed by Tucker Carlson and Jesse Watters, and repeated misinformation about whale deaths to drum up anti-wind opposition.
From a Sierra Club feature on the right-wing conspiracy to take down wind and solar: “Now, from coastal hamlets in New York to rural farming towns in Ohio, residents supporting wind and solar in their communities are running up against the same barrier: a chorus of disinformation, much of it tied to, or even circulated directly by, fossil-fuel-backed groups waging an existential fight to preserve the status quo.” |
| | 4. More Anti-ESG Bad Faith From Missouri State Auditor |
| Fitzpatrick accuses state pension funds of allowing ESG in through the side door — via proxy resolutions. In a new report, Missouri culture warrior and state auditor Scott Fitzpatrick attacks the state’s largest pension funds, saying they’ve used the proxy voting process to push pro-ESG policies, in violation of state law. Fitzpatrick is the current National Chair of the State Financial Officers Foundation (SFOF), which provides language for anti-ESG bills and executive orders. He says companies should adopt policies that require proxy advisors to vote based on an extremely narrow interpretation of risk and financial factors— an abdication of their financial responsibility that effectively eliminates pension holders’ oversight of their investments. More than 60 bills limiting the scope of proxy voting were introduced in state legislatures this year. Meanwhile, leading money managers have continued to backslide on support for ESG proxy measures: this year Vanguard didn’t back any ESG proposals at all, and BlackRock backed only 4%, down from 21% two years ago.
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| | 5. California’s Schools Narrowly Escape an Energy Efficiency Funding Cut |
| A bill that would have ended school HVAC improvement grants died in committee last week, thanks to a chorus of voices. School HVAC systems across America are famously outdated and inefficient, and about $500 million in utility-funded CalSHAPE grants last year helped California’s structurally underfunded schools make critically needed upgrades. Programs like CalSHAPE represent a tiny fraction of revenues, but the utilities say they drive up electricity costs. AB 3121 would have ended them and returned their funding to ratepayers as a small one-time credit of about $20 per utility bill. The proposal was withdrawn last Friday after strong opposition from a large coalition of school organizations, unions, environmentalists, and others. This effort was one example of how even blue states risk rolling back climate action. In the Northwest, Washington State’s Climate Commitment Act, which has already funded more than $2 billion worth of initiatives like electric school buses, vehicle chargers, and heat pump subsidies, is facing a ballot initiative funded by a right-wing PAC bankrolled by hedge funder Brian Heywood. It will be on the November ballot.
On the proposed Climate Commitment Act repeal: “Should the repeal effort succeed, the effect would be like shooting a cannon through the state budget,” said Clifford Traisman, a longtime lobbyist on environment and climate issues for Washington Conservation Action. |
| | THE CLEAN ENERGY JOB MARKET IS WHITE-HOT
Clean energy jobs grew twice as fast as other jobs last year, according to the Energy Department’s U.S. Energy and Employment Report: Clean energy job growth hit 4.2% — with a net 140,000 new jobs — compared to an overall job growth rate of 2%. The sector saw job increases in all 50 states, with Idaho, Texas, and New Mexico growing the fastest. Solar and wind saw particularly strong growth, at 5.3% and 4.5% respectively. The clean energy industry also unionized at a rate of 12.4%, higher than the broader energy industry’s 11%. At the same time, oil and coal jobs dropped by 6% and 5.3% respectively. (Jobs in the gas industry spiked, though, due to growth in extraction and generation; they’re up by 13%.) Construction work will continue for decades to drive the energy transition, meaning the clean energy sector will provide steady long-term career work for people in the building trades.
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