Today, the Center for Progressive Reform is publishing a new policy brief, Rising to the Challenge: How State Public Utilities Commissions Can Use the Inflation Reduction Act to Advance Clean Energy. This brief examines the ability of public utilities commissions (PUCs) to incorporate Inflation Reduction Act (IRA) funding into their energy planning processes in order to expand the uptake of renewable energy resources at a lower cost to consumers.
PUCs are state-level bodies that regulate utilities, but the sorts of reforms they are allowed to pursue, and the kinds of utilities they regulate (investor-owned, cooperative, etc.) vary from state to state. In some states, legislators have been more successful in leveraging their PUCs to push forward a clean energy transition than others. PUCs in Michigan, Missouri, and Virginia, for example, have all mandated their respective utilities to integrate IRA funding into their modeling. States where PUCs have used their oversight to do this have seen the modeled cost of renewable energy projects decline, and consequently, reduced future projected cost to customers.
Meanwhile, in North Carolina (where the Center has worked on a years-long campaign to attain much-needed energy reforms) the North Carolina Utilities Commission (NCUC) has failed to compel Duke Energy, the state’s monopoly utility, to integrate IRA funding into the state’s legislatively mandated carbon reduction plan. As a result, Duke Energy has developed a decarbonization plan that prioritizes fossil fuel gas over cheaper, more environmentally sound renewable energy sources leading to higher costs to the environment and consumers.
Our hope is that the case studies in this brief, covering successes in Michigan, Missouri, and Virginia, will inform and encourage others — including but not limited to North Carolinians — about ways forward to a cleaner, more affordable energy future in their state.
Based on our findings, we offer the following recommendations:
- State legislatures should provide effective oversight of PUCs to adopt more stringent clean energy goals in alignment with state climate plans. Having a legal mandate to devise a decarbonization plan at the state level at least cost can accelerate PUC adoption of IRA funding to meet the letter of the law.
- Public utilities commissions should fully embrace their roles as strict regulators of electric utilities to enforce the adoption of clean, affordable electricity for all people in service of the public interest.
- Electric utilities should incorporate IRA funding in their integrated resource plan modeling process to both save costs and lower costs to ratepayers. As with Michigan’s investor-owned utility, it is clear that hundreds of millions of dollars in savings are available with IRA-specific funding.
- Stakeholders, such as clean energy advocates and concerned members of the public, should continue to advocate for stronger clean energy legislation like state decarbonization plans and encourage their PUCs to work in tandem with state legislators to reduce carbon emissions and the cost of producing electricity by using renewable energy and IRA funding.
- Federal agencies should continue adopting environmental regulations like the EPA 111 rules that work in tandem with the “carrots” of IRA. Enforcing strong federal environmental regulations can ensure uniformity across states, despite differences in state-level legislation and PUC regulations.
Read the policy brief, and if you live in North Carolina, talk to your neighbors and your elected officials about the energy future you’d like to see.
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