Joseph Krist
Publisher
CARBON CAPTURE
Summit Carbon Solutions is abandoning two-thirds of its planned project to store carbon dioxide underground in North Dakota. The company, which had been granted permits to store CO2 in three designated areas in central North Dakota, has requested permits for two of the areas to be canceled. A North Dakota district court voided permits for all three areas earlier this year. Summit and the state are appealing that decision. Summit is now asking the Supreme Court to limit the appeal to one of the storage areas.
The company’s original proposal involved transporting carbon dioxide from ethanol plants in five states to central North Dakota where it could be injected into rock layers deep underground. The resistance to the project in North Dakota and Iowa has rendered the timing and potential return unfavorable. The company now plans to transport carbon dioxide to a storage site in Wyoming for injection underground.
The company’s storage permits from the Industrial Commission, the state law authorizing the Industrial Commission to issue those permits, and the pipeline route permit from the Public Service Commission are all the subject of litigation in North Dakota. District court judges have voided the storage permits and struck down the underlying law; both cases are on appeal to the Supreme Court. A decision in the third case is pending from the district court.
IOWA GAS TAX REALITIES
Gov. Mike Braun’s administration has asked lawmakers to tap into state cash reserves to cover losses from Indiana’s gas tax suspension. The Indiana Department of Transportation reported projected losses to local governments and the State Highway Fund will reach a combined $1.1 billion should the gas tax suspension continue through Dec. 4.
The State Highway Fund finished the fiscal year with $500 million in its own reserves, though the fund is projected to reach a $427 million deficit by the end of fiscal year 2027 if gas tax losses are not replenished. Braun has directed his administration to make local governments whole from the State Highway Fund, but would need legislative approval to use state reserves to do the same for INDOT.
NUCLEAR
The Energy Department announced that it would lend up to $1.9 billion to help restart the Duane Arnold nuclear power plant in Linn County, Iowa, which had ceased operating in 2020. NextEra, one of the nation’s largest power companies, in 2025 revealed plans to refurbish the plant’s reactor and seek regulatory approval to restart operations by the spring of 2029.
Duane Arnold came online in 1974 and shut down in 2020 after a storm damaged one of the plant’s cooling towers. It is considered to be the last nuclear plant which could be realistically restarted. Google has agreed to buy a portion of the plant’s electricity to help power data centers for artificial intelligence.
This after the California Legislature last month passed a bill to commission a study on partly lifting the ban on new reactors. California is considering extending the life of the currently operating Diablo Canyon Power Plant. Diablo Canyon’s two reactors began operations in 1985 and 1987 and they generated more than 8 percent of the electricity produced in California last year.
Solar, wind, hydropower and geothermal energy accounted for 70 percent of the electricity generated last year in the state, according to the Energy Information Administration, up from about 49 percent in 2020. That doesn’t mean the 70% of the power used in the state is from renewables. California obtains approximately 25% of the electricity it uses from out of state sources.
TEXAS MUNICIPAL POWER CHALLENGE
The Governor has proposed that the public utility systems serving San Antonio and Austin be privatized. Statewide, electric rates have risen about 40% on average since 2020, up from an average residential rate of 11.50¢ per kWh in 2020 to 16.11¢ per kWh in 2026, according to data from independent electricity marketplace.
The proposal reflects pressure from the state’s business sector and suburban retail customers of those utilities. They resent what they believe is a lack of input to the ratemaking process. The issue isn’t really the cost of power. The issue is the generation of revenue surpluses which are used to support the general funds of those cities. The argument isn’t new. Electric utility revenues transferred to local general funds to reduce individual property taxes are a long-standing issue especially for southeastern municipal utilities
In San Antonio, the city faces a $158 million deficit over the next two years and Austin faces a structural deficit that could grow past $100 million by the start of the next decade. Stripping cities of their utility ownership could exacerbate budget woes. Austin Energy transferred about $125 million to the city of Austin in 2025, according to Austin Energy. CPS Energy has budgeted a payment of $559.7 million to the city of San Antonio for fiscal year 2027.
A study of federal data undertaken in 2024 by the American Public Power Association found customers of a public utility on average pay 14% less than customers of other utility types. The Houston region however, experiences some of the highest electricity rates on the ERCOT grid.
COAL
A federal appeals court struck down an order from the Trump administration that forced the J.H. Campbell coal plant in West Olive, Michigan, to keep running despite its plans to close in May 2025, citing an “energy emergency.” Campbell is one of five plants operating under such orders. The only thing that this tactic has accomplished is higher rates to support the higher cost power.
Consumers Energy has recently reported in a financial release that it cost $259 million to comply with the emergency orders through the end of June. The Energy Department has also issued emergency orders to keep coal plants open in Washington, Indiana, Florida and Colorado. This mirrors the experiences of the other utilities operating coal plants under the federal orders.
UP IN SMOKE
On November 3, Massachusetts voters will decide Question 8, a ballot measure that would repeal the state’s licensed adult-use cannabis market. If it passes, the vote would mark the first time voters anywhere have rolled back an existing state cannabis legalization law. Question 8 would repeal Chapters 94G and 64N of Massachusetts law, ending licensed adult-use retail sales, cultivation licensing, home cultivation rights and the state’s marijuana excise tax. Medical cannabis and simple possession (up to two ounces, with a civil penalty above one ounce) would remain legal. If voters approve it, the repeal takes effect January 1, 2028.
The state’s Cannabis Control Commission currently oversees more than 230 licensed dispensaries, roughly 150 cultivation operations and close to 90 product manufacturers; under Question 8, those businesses would need to convert to medical-only licenses, sell off inventory or close. In April, the Justice Department moved medical marijuana from Schedule I to Schedule III of the Controlled Substances Act. In June, bipartisan lawmakers reintroduced the SAFE Banking Act, again aiming to give financial institutions clearer legal footing to serve state-licensed cannabis businesses.
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