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Electricity Charges, Mandates, and Subsidies

While the DDPP reports identify clear emissions targets and energy resource scenarios that can meet them, they do not tell us which policy levers to pull to get there. The chapter focuses on specific policy changes to electric power mandates, subsidies, and retail customer charges that can help to facilitate the transition to deep decarbonization. Existing state and federal policies regarding these tools demonstrate their potential for balancing economic, consumer welfare, and environmental goals as the electric power system adapts to various DDPP scenarios. It will be necessary to significantly scale up and recalibrate electric power mandates, subsidies, and retail customer charges to successfully arrive at any of the DDPP scenarios in the electric power sector. While no one change to these tools will be sufficient on its own to achieve the DDPP’s goals, state regulators, Congress, and federal agencies are well positioned to design a package of reforms to ensure that the transition to deep decarbonization does not impair economic efficiency or consumer welfare.

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Top Ten Resources on Electricity Charges, Mandates, and Subsidies: To help users take a brief survey of some of our favorite materials from this pathway, the MCLI team has drafted a "Top 10" resources list for state and local governments trying to address Electricity Charges, Mandates, and Subsidies. Check it out here.

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Resource States and State Governments

RMI report, State Energy Policy in a Land of New Federal Opportunity

The Rocky Mountain Institute offers this 2024 guide to new and expanded federal funding programs, and highlights opportunities for states to pass and pay for clean energy policies. The report highligh...
Example States and State Governments

New Jersey’s AB 3723 and Executive Order 28

New Jersey’s AB 3723 requires 50% of energy sold in the state come from Class I renewable resources by 2030, of which 3,500 MW should come from offshore wind. Governor Murphy also signed Executive Ord...
Example Public Utilities

California IRP Proceedings on Climate Targets, Energy Mix

In February 2022, the California Public Utilities Commission (CPUC) adopted a 35 million metric ton (MMT) 2032 electric sector greenhouse gas planning target, which is more stringent than the previous...
Resource Congress

Proposed Clean Energy Innovation and Deployment Act of 2020

This proposed 2020 Congressional legislation: Would provide financial support for RD&D into long-term energy storage and carbon storage infrastructure, among other things. Would enact a federal Clean ...
Example States and State Governments

Renewables Built Through New York Power Authority

Under New York’s 2023 budget (see Part QQ), the New York Power Authority will have broad new ability to build renewables and can compete for state contracts subsidized by ratepayers. The legislation a...
Example Public Utilities

X-Cel Energy’s Time-of-Use Pilot

Minnesota’s PUC approved a time-of-use pilot program proposed by X-Cel Energy expected to drive greater use of renewables and reduce peak demand. The two-year, 17,500-customer plan is intended to use ...
Resource States and State Governments

Report, Designing Renewable Electricity Policies to Reduce Emissions

Resources for the Future authored a 2012 discussion paper on how renewable electricity policies can be redesigned to promote investment in the highest-value generators (displacing the most polluting c...
Resource Private Entities

Report, Guidance for Utilities Commissions on Time of Use Rates

A team of consumer and clean energy advocates authored a 2017 paper, Guidance for Utilities Commissions on Time of Use Rates, making recommendations on developing policy goals, program design, impleme...
Example States and State Governments

Virginia’s Executive Order 43

Executive Order 43 (2019) calls for 100% carbon-free energy by 2050, with a 30% interim target by 2030. The EO includes targets of at least 3,000 megawatts of solar and onshore wind under development ...
Example States and State Governments

Maine’s Integrated Grid Planning Legislation

In May 2022, Maine’s enacted LD 1959, requiring electric utilities to undertake an “integrated grid planning” process every five years, and for those plans to support the state’s goal of reducing gree...
Example States and State Governments

Hawaii’s HB 623

In June 2015, Hawaii enacted HB 623, a law requiring all electric power to come from renewable sources by 2045.
Example States and State Governments

Washington’s 2019 SB 5116

Washington’s 2019 SB 5116 forces utilities to provide 100% carbon neutral power by 2030 (although 20% of this obligation may be met by the purchase of RECs, the payment of $100/ton administrative pena...
Resource Public Utilities

Report, Independent System Operators (ISOs) & Carbon Pricing: An Explainer

This 2020 report from Climate Xchange surveys the policy options for carbon pricing at the Independent System Operator (ISO) level. ISOs coordinate real-time electricity flow, ensure fair competition,...
Example States and State Governments

Nevada’s SB 358

Nevada’s SB 358 (passed in 2019) increases the state’s RPS to 50% by 2030; with a goal of reaching 100% clean energy by 2050.
Resource States and State Governments

Illinois Legislation Backstopping RPS Payments

In February, 2025, Illinois adopted HB 587, which realigns responsibilities for paying energy suppliers under contract through the state’s renewable portfolio standard. The law was adopted in anticipa...
Example States and State Governments

New York’s Community Risk and Resiliency Act of 2014

The Community Risk and Resiliency Act of 2014 requires the state to adopt official projections of future sea level rise, and it mandates that in many specified state programs, sea level rise and some ...
Example Public Utilities

Connecticut’s Acceptable Components of Utility Fixed Charges

In 2015, Connecticut passed a law defining acceptable components of a utility fixed charge as the fixed costs, operations and maintenance expenses that are directly related to metering, billing, servi...
Example Public Utilities

California Time-of-Use Rates Order

A 2015 Commission Order established time-of-use rates across California by 2019. California’s time-of-use rates apply to all commercial, industrial and agricultural customers by default, while residen...
Example Public Utilities

Arizona Carbon-Free 2050 Utility Target

Throughout 2020, the Arizona Corporation Commission developed plans for an update to the state’s Renewable Energy Standard that would require utilities to fully decarbonize their electricity supply by...
Example States and State Governments

Maryland Act to Consider Climate and Labor in Utility Regulation

This law, enacted in May 2021, requires the Maryland Secretary of the Environment to include any issues that the Public Service Commission (PSC) must consider relating to climate change in its recomme...
Example States and State Governments

New York’s 2019 Climate Mobilization Act

New York’s 2019 Climate Mobilization Act established a 2030 goal to increase energy efficiency from 2012 levels by 23%. The Act also incorporated the governor’s previous target of 185 trillion Btus of...
Model Law States and State Governments

LPDD Model Law: State Demand Charges Legislation

In many jurisdictions, the current rate structure for electrical service discourages the development of high-performing DC fast chargers for electric vehicles. Electricity bills in those jurisdictions...
Resource Congress

Report, The Social Cost of Carbon in Taxes and Subisidies

Columbia’s Center of Global Energy Policy has published an analysis of recent efforts to use the SCC as a direct value for taxes and subsidies applied to economic activity with a negative or positive ...
MCLI Resource

LPDD Top Tens: Electricity Charges, Mandates, and Subsidies

For those in search of a shortcut through the vast LPDD database, we're proud to highlight a subset of our most useful pathways for state and local government leaders on electricity charges, mandates,...
Resource Executive Branch

Report, Carbon Pricing in Wholesale Electricity Markets: An Economic and Legal Guide

The Institute for Policy Integrity’s 2020 report explains how such carbon-pricing rules in organized wholesale electricity markets can improve economic efficiency. It then explores the economic princi...
Resource Congress

National Academies Papers on the Cost of Carbon

The National Academies of Sciences, Engineering and Medicine published a 2016 Assessment of Approach to Updating the Social Cost of Carbon (downloadable with free account), the lead measure by which f...
Resource Public Utilities

Report, Best Practices in Utility Integrated Resource Planning

The Regulatory Assistance Project prepared a 2013 report, Best Practices in Utility Integrated Resource Planning, which describes IRP requirements in three states, Arizona, Colorado, and Oregon, which...
Example States and State Governments

New York’s Climate Leadership and Community Protection Act

New York’s Climate Leadership and Community Protection Act increased the ambition of the state’s Renewable Portfolio standard to target 70 percent renewable electricity by 2030 and 100 percent carbon-...
Example States and State Governments

New Mexico’s Energy Transition Act

New Mexico’s Energy Transition Act (2019) amends the state’s renewable portfolio standard to target 80% renewable energy by 2040 and 100% zero carbon energy by 2045. The bill allows utilities to secur...
Example States and State Governments

Virginia Launches Commission on Electric Utility Regulation

In a procedural move, Virginia’s Legislature has fully passed, pending the governor’s signature, a bill that would reboot and fully staff its Commission on Electric Utility Regulation. Its members wou...
Resource Executive Branch

FERC Technical Conference regarding Carbon Pricing in Organized Wholesale Electricity Markets (Sept. 2020)

At a September 2020 FERC Technical Conference, legal experts agreed that FERC does have the legal authority to implement a carbon price. Under sections 206 and 205 of the Federal Power Act, FERC has t...
Example Public Utilities

Tucson Electric Power’s Time-of-Use Rate

Tucson Electric Power in Arizona received received approval for a new optional time-of-use rate which became the default rate for new customers starting in January 2019.
Example States and State Governments

Texas’ RPS

In 2005, Texas’s legislature amended the state’s renewable portfolio standard to include a target of 10,000 MW of renewable energy by 2025. That target was reached in 2010, fifteen years ahead of sche...
Resource Public Utilities

Fifty States Reports

The Fifty States Reports produced by the NC Clean Energy Technology Center track, among other things, utility rate cases across the country to give a national snapshot of ratemaking trends.
Resource Private Entities

Report, The Adoption of New Smart Grid Technologies

The Rand Corporation’s 2015 report, The Adoption of New Smart-Grid Technologies, includes case studies of policy successes as well as a chapter on policy levers that jurisdictions can use to advance t...
Resource Congress

Proposed Clean Energy Standard Act of 2019

The proposed Clean Energy Standard Act of 2019 would establish the federal Clean Energy Standard and a CES credit trading market, incentivize development and deployment of zero-emission technologies, ...
Example States and State Governments

Maryland’s Clean Energy Jobs Act

With 2019’s Clean Energy Jobs Act, Maryland’s RPS is committed to a 50% renewable energy goal by 2030, and the state is required to engage in a planning process to achieve 100% renewable energy by 204...
Resource States and State Governments

NCSL RPS database

The National Conference of State Legislatures maintains a database of all renewable portfolio standards and voluntary targets, including citations to relevant legislation.
Model Law States and State Governments

LPDD Model Law: State Legislation to Decarbonize the Generation of Electricity

This model state electric decarbonization statute is based on 2019 legislation enacted in Washington State, the Clean Energy Transformation Act (CETA), which commits that state to a retail electricity...
Example States and State Governments

Massachusetts’ Energy Efficiency Resource Standard

Massachusetts’ Energy Efficiency Resource Standard is considered to be one of the most effective and ambitious in the nation. It was established by Massachusetts’ Green Communities Act, which requires...
Resource States and State Governments

Report, Evolving the RPS: Implementing a Clean Peak Standard

Strategen Consulting’s 2018 paper, Evolving the RPS: Implementing a Clean Peak Standard, advises states on how to expand RPS’s to target clean energy during peak demand times, which may require the gr...
Example States and State Governments

New York’s “Peaker” Rule

In 2019, the New York State Department of Environmental Conservation adopted a regulation to limit nitrogen oxides (NOx) emissions from simple-cycle combustion turbines (referred to as the “Peaker Rul...
Example Public Utilities

National Grid RI’s Advanced Metering Developments

In November 2017, National Grid filed a plan to implement an opt-out time varying rates program by 2022. In August 2018, the Commission requested further development of the advanced metering functiona...
Example Public Utilities

Massachusetts’ Grid Mod Investment Order

The Dept. of Public Utilities issued a 2018 Order authorizing utilities to make $220 million in investments in grid modernization technologies over three years to upgrade their distribution systems to...
Example States and State Governments

Michigan’s Expanded RPS Targets

In November, 2023, Michigan’s legislature approved SB 271, which will increase targets under the state’s renewable portfolio standard. SB 271 requires an electric provider to achieve a renewable energ...
Model Law States and State Governments

LPDD Model Law: Achieving Regulatory Realignment of Public Utility Policies with Energy and Environmental Goals

One of the obstacles to achieving decarbonization in the electric power sector is that many of the laws and statutes that govern PUCs are antiquated. The absence of statutory requirements to consider ...
Example Local Governments

Boulder CO’s SmartGridCity Project

Xcel Energy embarked on a large-scale project known as SmartGridCity in 2008, including installing two- way fiber-optic communication technology and smart meters for one quarter of the population. The...
Example Public Utilities

Mississippi IRP Process

In 2019, the Mississippi Public Service Commission adopted a formal integrated resource planning process that requires utilities to consider distributed energy resources and demand-side management (in...
Example States and State Governments

Rhode Island’s Decoupling Law

Senate Bill 2841A decoupled utility profits from utility sales volume to remove disincentives to energy efficiency and demand reduction measures.
Example States and State Governments

Colorado’s HB-19-1261

Colorado’s HB-19-1261 grants the Public Utilities Commission wide discretion in pursuing a regulatory agenda to meet the state’s goals of reducing GHG emissions by at least 26% by 2025, 50% by 2030, a...
Resource Congress

Report, Powering the Future: An Inclusive National Clean Energy Standard with Negative Emissions Technologies

This May 2020 note from the Columbia Journal of Environmental Law puts forward the framework for a national Clean Energy Standard that can effectively incorporate negative emissions technologies while...
Resource Executive Branch

Report, Enhancing the Social Benefits of Regulatory Review

The Institute for Policy Integrity’s 2020 report, Enhancing the Social Benefits of Regulatory Review, focuses on potential reforms through the Office of Information and Regulatory Affairs (OIRA) at th...
Example States and State Governments

Colorado Order on Using Carbon Costs in Resource Plans

Colorado Rev. Stat. § 40-2-123(1)(b) allows the Colorado Public Utility Commission to consider the social costs of greenhouse gas emissions. The statute says that “[t]he commission may give considerat...
Resource States and State Governments

ACEEE Report, How Utility Energy Efficiency Programs Can Use New Federal Funding

The federal Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) together provide approximately $50 billion for energy efficiency implementation. The programs funded by these laws can...
Resource Public Utilities

Report, Pricing Do’s and Donts

The Regulatory Assistance Project’s publication, Pricing Do’s and Don’ts, documents the impact of rate design on efficiency investments and supports the conclusion that even he costs of power plants, ...
Resource States and State Governments

C2ES Decoupling Policies Database

C2ES maintains a state-by-state database of decoupling policies, containing a general subject matter overview, brief descriptions of state policies, and links to relevant documentation.
Resource Congress

Resources for the Future Reports on Social Cost of Carbon

Resources for the Future coordinate economists and scientists to improve the science behind estimates of the SCC. They have published a range of briefs, reports, and testimony on improving utilization...
Example States and State Governments

Washington Administrative Code 480-90-238

The Washington Administrative Code 480-90-238 stipulates that when the PUC applies a Lowest Reasonable Cost test, it must consider, among other things, “the cost of risks associated with environmental...
Example Congress

Report, An 80×30 Clean Electricity Standard: Carbon, Costs, and Health Benefits

While federal lawmakers discussed the potential for passing a national clean energy standard (CES) in 2021, the Clean Energy Futures group issued a report that analyzes the energy, economic, environme...
Example States and State Governments

Minnesota Order on Cost of Carbon in Resource Planning

Minnesota Statute § 216B.2422 Subdivision(3)(a) directs the PUC to “quantify and establish a range of environmental costs associated with each method of electricity generation,” which utilities are di...
Resource Public Utilities

Report, Recovery of Utility Fixed Costs

Berkeley Lab published a 2016 report, Recovery of Utility Fixed Costs, which surveyed the tensions between fixed and variable rates, as well as a variety of alternative rate structures, from the persp...
Resource Public Utilities

Report, Getting More Granular

The Solar Energy Industries Association has prepared a white paper, Getting More Granular, analyzing how time and location-specific values may change the economics for distributed energy projects.
Resource Local Governments

RAP Report, Principle of Smart Heat Electrification

RAP’s 2020 report surveys policies that impact smart heat electrification, including electricity pricing, energy efficiency obligations, carbon intensity standards, financial support schemes, building...
Resource Congress

Report, Clean Energy Standards: State and Federal Policy Options and Implications

C2ES and RAP prepared a 2011 white paper on state and federal policy options for implementing Clean Energy Standards.
Resource States and State Governments

New York’s Proposed S. 8198 (2022)

This 2022 bill would ensure that state regulation and oversight of gas utilities provides for the equitable achievement of the climate justice and emission reduction mandates set forth in New York’s C...
Resource Public Utilities

Nix the Fix Fact Sheet

Indiana’s Citizen’s Action Coalition has launched a campaign against higher fixed charges in utility rates, producing a fact sheet documenting the adverse effects on equity, efficiency, and competitiv...
Example States and State Governments

California Proposed Decision on Carbon Costs in Integrated Resource Planning

California’s Public Utility Code § 701.1(c) gives the state’s Public Utilities Commission a mandate to include “a value for any costs and benefits to the environment,” when it is “calculating the cost...
Example States and State Governments

Illinois’ Future Energy Jobs Act

Illinois’ 2017 Future Energy Jobs Act calls for updates to Illinois’ renewable portfolio standards, net metering, and energy efficiency standards, as well as a new zero emissions credits plan. Under t...
Example Public Utilities

Central Hudson 2017 Rate Settlement

In a 2018 settlement of Central Hudson’s 2017 rate case, the utility’s fixed charge will drop from $24/month in 2019 to $19.50/month in 2021. “Numerous commenters, including various town, city and cou...
Resource Congress

Report, A Roadmap to 100% Clean Electricity by 2035

This February 2021 report from Data for Progress and the Evergreen Coalition outlines how Congress can use a CES to put the U.S. on a path to 100% clean electricity by 2035. The report details how a C...
Example States and State Governments

California SB 100

California’s 2018 SB 100 increases the ambition of the state’s RPS target to 100 percent carbon-free electricity by 2045. The law puts forward interim targets of 50% renewable energy by 2026 and 60% r...
Resource States and State Governments

Massachusett’s efforts towards developing a Clean Peak Energy Standard

On August 9, 2018, Massachusetts passed An Act to Advance Clean Energy, which requires the Dept. of Energy Resources to develop a program requiring retail electricity providers to meet a baseline mini...
Example States and State Governments

Maine’s LD 1494

Maine’s LD 1494 increases Maine’s Renewable Portfolio Standard to achieve 80% renewable energy by 2030, up from 40 percent previously, and a goal of 100% by 2050. In addition, the bill requires the Pu...
Example States and State Governments

Virginia’s HB 868

Virginia’s HB 868 allows retail electric customers to purchase 100% renewable electricity from electric suppliers, including incumbent electric utilities that are not serving their service territory d...
Resource Public Utilities

Findings of a 2016-2017 analysis of investor-owned utility proposals to increase mandatory fixed fees on residents

NRDC, NCLC, and Vote Solar researched the results of rate cases across the US in 2016 and 2017, finding a trend of utilities aggressively proposing fixed charge increases, which Public Service Commiss...
Example States and State Governments

Hawaii’s Law Adjusting RPS Metrics to Actual Generation

In July 2022, Hawaii passed HB2089, changing the way the state calculates its progress under its renewable energy standard. HB2089 changes the relevant metric from sales to actual generation, which sh...
Resource Executive Branch

Report, The Social Cost of Greenhouse Gases: An Overview

In December 2023, EPA finalized updated values for the social cost of greenhouse gases (SC-GHG), following public comment and expert peer review. The agency derived these estimates using the best avai...
Resource Congress

Proposed Renewable Electricity Standard Act of 2019

The proposed Renewable Electricity Standard Act of 2019 would require retail electricity providers to purchase RECs in compliance with a goal of at least 50% electricity from renewables by 2035, while...
Resource Congress

Proposed CLEAN Future Act (2020)

The proposed Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act (2020) is a large, economy-wide climate bill released by the House Committee on Energy and Commerce. Among ...
Resource Public Utilities

Report, Opportunities for Valuing Climate Impacts in U.S. State Electricity Policy

The Institute for Policy Integrity’s 2019 report, Opportunities for Valuing Climate Impacts in U.S. State Electricity Policy, sheds light on where state regulators have been legislatively granted the ...
Example States and State Governments

Nevada’s AB465 (2019)

Nevada’s AB465 (2019) requires electric utilities to offer an expanded solar access program to residential customers and to certain nonresidential customers who consume less than 10,000 kilowatt-hours...
Resource States and State Governments

New Jersey’s Clean Energy Act

On May 23, 2018 Governor Murphy signed the Clean Energy Act P.L.2018, c.17. The Clean Energy Act adopts several measures, including: Renewable Portfolio Standard: Requires 35% of the energy sold in th...
Example Public Utilities

PJM’s Grid of the Future Report

In May 2022, the PJM Interconnection released a roadmap for handling the various changes affecting its system, including the retirement of fossil-fueled generation, growth in renewable energy and stor...
Resource Public Utilities

Report, 2025 California Demand Response Potential Study

A Lawrence Berkeley National Labs report analyzing California’s Demand Response programs concluded that well-designed time-of-use rates could also optimize the use of DER for grid services and limit i...
Resource Congress

Proposed Clean Energy Standard Act of 2012

The proposed Clean Energy Standard Act of 2012 would have adopted a standard of 84% clean energy by 2035, including partial credits for natural gas, nuclear, and hydroelectric. EIA estimated that the ...
Example States and State Governments

Rhode Island’s 100% Renewable Target by 2033

In June 2022, Rhode Island enacted H7277, requiring 100% of the state’s electricity demand be met with renewable energy by 2033. The legislation sets this target through revisions to the state’s exist...
Resource Public Utilities

Report, Scaling Clean: Assessing Market Options for Clean Energy and Capacity in PJM

PJM, the regional transmission organization (RTO) covering 13 states and the District of Columbia, is considering significant changes to its market rules. This 2022 report from RMI, reviews two clean ...
Resource Congress

Costofcarbon.org

Costofcarbon.org, a project of the Institute for Policy Integrity, compiles a suite of resources and literature on the evolving effort to properly value the cost of carbon pollution, and highlights ef...
Resource Congress

Clean Energy Standards Issue Brief

Resources for the Future has prepared an issue brief on a potential national Clean Energy Standard, addressing past legislation, state models, and design options.
Example States and State Governments

Rhode Island’s Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006

Rhode Island’s Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 establishes a Least Cost Procurement mandate, requiring utilities to acquire all cost-effective energy effici...
Example States and State Governments

Virginia’s Grid Transformation and Security Act (2018)

Virginia’s Grid Transformation and Security Act of 2018 aims to return money to utility customers, unwind an existing rate freeze, reform the oversight process for electric utilities, and establish a ...
Resource Public Utilities

RAP report, Electric Cost Allocation for a New Era

RAP’s 2020 manual focuses on cost allocation practices for electric utilities in the United States and their implications, acknowledging that charting a new path on cost allocation is an important par...
Example Public Utilities

Black Hills Energy Fixed Charge Requests

In 2018, the Colorado Public Utilities Commission rejected the Black Hills Energy request for a fixed charge increase from $16.50/month to $20.13/month and recommended lowering it to $8.77/month.
Resource Public Utilities

RAP Rate Design Resources

The Regulatory Assistance Project develops knowledge and best practices pertaining to rate design, including specific resources on time of use rates.
Example Public Utilities

NYISO carbon pricing proposal

The New York Independent System Operator has released a Carbon Pricing Straw Proposal, which would reflect the cost of carbon emissions in wholesale energy market offers via a “carbon charge.” The Pro...
Resource Congress

Institute for Policy Integrity Report on Social Cost of Carbon

The Institute for Policy Integrity has published a suite of helpful reports analyzing the Social Cost of Carbon. A 2015 report, Expert Consensus on the Economics of Climate Change, found among its res...
Resource States and State Governments

Connecticut’s Performance-Based Regulation Order

In April 2023, the Connecticut Public Utilities Regulatory Authority (PURA) issued a Final Decision as part of its investigation into a Performance-Based Regulation (PBR) framework for the state’s ele...
Example States and State Governments

New Jersey’s A-3723 and Implementing Order

2018’s A-3723 requires each utility to implement energy efficiency measures to reduce electricity usage by 2 percent and natural gas usage by 0.75 percent annually. In 2020, NJ’s PUC issued an order r...
Example Public Utilities

Duke Energy’s “Resource Acceleration” Green Tariff Option

In July, 2024, North Carolina regulators approved a controversial green tariff proposal from Duke Energy. Green tariffs, which allow customers to opt into a utility program that purports to offer them...
Example States and State Governments

Oregon’s SB 1547

Oregon’s SB 1547 boosted the state’s renewable energy mandate to 50 percent renewables by 2040. Section 28 of SB 1547 requires the Oregon Public Utility Commission to establish a program for the procu...