[co-author: Joshua Rosen, Summer Associate]
Maine, Massachusetts and Maryland all passed legislation this summer that expands the rationale for state utility regulators to include addressing the impacts of climate change. These efforts mark an emerging trend of legislative bodies directing utility regulators to help advance climate policies. This reinforced vision of the regulation of public services gives me hope in the fight against climate change.
Despite the fact that utility regulators play a huge role in our energy sector – the sector primarily responsible for historic greenhouse gas emissions in the United States – they have had little to do with tackling the issue. climate change. While several states have formally authorized regulators to work in an environmentally responsible manner, existing provisions have not specifically called for climate change. In most states, the work entrusted by legislatures to utility regulators has been limited to ensuring the safety, reliability and affordability of the services offered by regulated utilities (and ensuring that these utilities obtain a reasonable yield). Legislatures in three states have now revised job descriptions for regulators to include reducing greenhouse gas emissions and considering climate impacts in regulatory procedures.
In Maine, Governor Janet Mills signed LD 1682, which adds the reduction of greenhouse gas emissions and the mitigation of disproportionate energy loads to the objectives of the Maine Public Utilities Commission (MPUC) and directs the MPUC adopt rules to implement this new objective. The bill also directs the PUC to prioritize procedures that advance the decarbonization of the utility sector and mitigate energy burdens on:
environmental justice populations, frontline communities, and utility customers who are underserved by utility or power policies, programs, and systems due to geography, race, income or other socio-economic factors.
The Massachusetts Climate Bill, signed by Governor Baker, makes similar progress on climate policy within the Massachusetts Department of Public Utilities (DPU). In addition to sweeping changes to emissions targets, building codes, access to renewable energy and other policy areas, the bill expands the scope of the DPU to include safety, fairness and the reduction of greenhouse gases.
The Maryland legislature recently passed HB 298. The bill, which became law without Gov. Hogan’s signature, directs the Maryland Civil Service Commission to review “global climate protection” and labor standards in the supervision and regulation of public services. An earlier version of this bill failed in the state’s previous legislative session.
It should be noted that the state of Connecticut established a similar guideline for its utility regulators several years ago, but through a completely different mechanism. The decisions of the Utilities Regulatory Authority are legally guided by the state’s energy strategy. As part of its 2018 climate bill, the Connecticut legislature formally linked the state’s energy strategy to the state’s climate goals.
Will the relatively straightforward legislative act of expanding the regulatory mandates of utilities to include climate have the long-term decarbonization results climate advocates expect?
I am hopeful for three reasons:
First, utility regulators in those states now have the power to formally review climate impacts in regulatory proceedings. Without this authority, regulators cannot formally view climate impacts as a factor in their proceedings without the threat of being overturned by appellate courts for overstepping legal authority.
Second, there is already evidence that utility regulators are ready to act on such climate mandates. Through the Clean Energy Omnibus Act of 2018, the District of Columbia called on its Civil Service Commission (PSC) to consider “preserving the quality of the environment, including the effects on climate change. and the District’s public climate commitments ”. According to an analysis by the Institute for Market Transformation:
the impact of the change was immediate; the PSC and stakeholders have referred to the new expanded mandate in cases and hearings, even before the law came into force in March 2019.
The PSC then dismissed a rate-related case at the end of 2019, citing the climate mandate as the main reason for the refusal.
Finally, I think it’s fair to say that these three states are most likely the start of the trend rather than the end. More states are likely to follow this path, as the existence of these precursors can standardize climate standards for regulating utilities nationwide. Hopefully, PUCs will begin the serious work of integrating climate issues into everything they do.
* This entry was also written by Foley Hoag’s summer associate Joshua Rosen.