Local, State, and Federal Policy Disconnect Driving the U.S. into an Energy Crisis

At the exact moment American industry needs additional electricity to make billions in economic investments, local, state, and federal government policymakers are disrupting efforts to generate that needed electricity. 

For supply to keep pace with demand given these trends, PJM needs as many new generation to find their way onto the system as possible. PJM has cleared about 40,000 MW of projects through its study process that are, nevertheless, not getting built due to supply chain, financing, and siting issues. If this sluggish pace of development continues, PJM projects a shortfall in supply by the end of this decade – or sooner.

The Biden Administration’s battle against coal has intensified in recent months. The U.S. EPA proposed new coal power plant rules that mark the first time the federal government has restricted carbon dioxide emissions from existing coal-fired power plants. The rule also would force future electric plants fueled by coal or gas to control up to 90% of their carbon pollution. Driven by regulatory challenges, the United States is transitioning away from its reliance on coal for energy. The EPA’s most recent rules suggest that coal plants that expect to retire by 2039 would face a less stringent standard but still would have to capture some emissions. Coal plants that are set to retire by 2032 would not be subject to the new rules. As a result, coal is dying as an energy source. 

Instead, the Biden Administration is pushing billions in new funding to promote the use of renewable energy.  However, not every region or state is running to develop renewable energy projects. A recent Columbia University study found that renewable energy projects have encountered significant opposition in at least 45 states with at least 228 local laws, ordinances, and policies being enacted in 35 states to restrict renewable energy projects. Many farmers do not like wind and solar projects taking up their neighbor’s farmland. 

In an age of political disruption and populism, many states are working to oppose the expansion of wind and solar projects. 

  • Ohio changed state law to give unique powers to townships and counties to decide if wind and solar projects will benefit their communities. This unprecedented move is leading to the decline in wind and solar projects located in Ohio which was the clear goal of the law change. Again, a Columbia University study pointed out that until October 2022, the Ohio Power Siting Board had never rejected an application for a solar energy project. Since October 2022, however, the Board has rejected at least three such applications (Birch Solar, Cepheus Solar, and Kingwood Solar). In addition, between April 2022 and March 2023, at least 11 counties in Ohio adopted binding resolutions to prohibit large renewable energy projects in all their unincorporated territories or very large swathes of those territories. There are now at least 13 counties in Ohio that have adopted such resolutions since October 2021, when a state law allowing counties to establish restricted areas went into effect (these include Allen, Auglaize, Butler, Crawford, Columbiana, Hancock, Knox, Logan, Marion, Medina, Ottawa, Seneca, and Union).
  • In March 2023, Buffalo County, Nebraska, adopted an exceptionally restrictive wind ordinance, which requires that turbines be set back 3 miles from the nearest property lines and 5 miles from any village or city. At least 8 other Nebraska counties also require that wind turbines be set back by at least 1 mile from either property lines or dwellings, including Wheeler (5 miles from dwellings), Thomas (3 miles from property lines), Hamilton (2 miles from property lines), Dakota (2 miles from dwellings), Brown (1 mile from property lines), Gage (1 mile from property lines), Otoe (1 mile from property lines), and Jefferson (1 mile from dwellings). Meanwhile, Stanton County has effectively banned commercial wind projects altogether.
  • In Virginia, at least 7 counties adopted restrictive solar ordinances or moratoria between June 2022 and May 2023 (these include Charlotte, Culpeper, Franklin, Halifax, Page, Pittsylvania, and Shenandoah). Some of these are exceptionally burdensome. For example, Pittsylvania County now prohibits the construction of any solar farm within 5 miles of any other solar farm and limits utility-scale solar projects to 2% of the total acreage of any zoning district. Franklin County has imposed a countywide cap of 1,500 acres for all ground-mounted solar projects.
  • Since September 2022, at least two Michigan townships (LaSalle and Milan) have adopted ordinances limiting utility-scale solar energy projects to industrial districts and prohibiting such projects on land zoned for agricultural use.
  • In Wisconsin, 4 towns in Dane County (Deerfield, Dunn, Springfield, and Westport), have policies to restrict solar from agricultural land.

The delegation of state energy policy and regulation happens at the same time national energy policy is closing all the coal power plants that have kept the Industrial Midwest running at full steam. Add in data centers and continued manufacturing growth with some EVs on the streets and you have a disaster looming in America’s industrial heartland from an electricity generation standpoint.

This disconnects between local, state, and federal government policymakers puts in jeopardy the economic success of the United States and needs a solution to address this budding energy crisis.