Joseph Krist

Publisher

CLIMATE LITIGATION

Supreme Court Justice Samuel Alito recused himself from the SCOTUS review of Boulder, Colorado’s suit against the fossil fuel industry. Alito had faced calls to recuse himself from Suncor v. Boulder over his financial interests in energy companies, specifically from two oil companies. Alito did recuse himself when the court turned away an appeal from the companies in the Colorado case in 2023.

Arguments were held this week. It was the first case to be argued to start the court’s year and it presents some thorny issues to be sorted out. On one hand, justices appeared reluctant to endorse the argument that climate change lawsuits brought by state and local governments against fossil fuel companies are constitutionally prohibited. At the same time, they appeared concerned about whether such lawsuits can be sustained.

On the other hand, the justices seem to try to weigh the risks of far-reaching fallout whether they allow or restrict burgeoning lawsuits targeting oil companies, acknowledging fears of near-limitless litigation but also struggling to distinguish climate torts from famous legal battles involving tobacco and opioids. Both of those industries operated under federal as well as state/local regulation as do the energy companies.

MEDICAID

January 1, 2027 is when the bulk of changes to the safety net including reductions in Medicaid eligibility take effect. Three states – Montana, Nebraska, and Arkansas, and – have already begun the process of implementing those changes which include significant reporting requirements and work rules for many recipients. The evidence so far indicates that the fears of many regarding the effort to reduce the rolls are justified.

Much of that disruption comes from a combination of complex documentation requirements and a lack of infrastructure to support and manage the work rule enforcement steps. Those steps include ownership and/or access to a computer which remains a real issue in poorer rural areas. Many states will likely not have staffed up to handle the expected paper flow.

Montana has been the focus of much attention as it began its rollout of work rules on October 1. The state admits that its compliance function for Medicaid is inadequate and understaffed. It has hired only one third of the projected needed workforce and it has not yet installed systems to process the required documentation. This will force students who are exempt from work requirements to document their compliance for one year via paperwork.

The uncertainty raises issues for not just the hospitals and doctors in a state but also for state governments who are the last layer of funding for indigent care. The enactment of the Affordable Care Act – whatever one thinks about it – did relieve some of that pressure which had become source of pressure for the states. The proposed changes may indeed save some money on one side of the Medicaid equation but that benefit will be mitigated by increased funding for indigent care.

NEW TEST FOR TRANSIT FUNDING

The Federal Transit Administration is currently seeking to issue revised guidance for the award of Capital Investment Grants. Under the FTA’s revised proposals, the average birth and marriage rates of the corridor in which the project under review is situated would be taken into account at this juncture. Regions whose rates meet, exceed or are just below the nationwide threshold will be essentially rewarded for promoting fertility by making them eligible for having a further 10 percentage points of their costs covered. Support for a given project is currently capped at 60 percent for new developments and at 80 percent for pre-existing ones simply being upgraded or expanded.

It’s a clear example of ideology warping policy making. Many of the populations which benefit from the program historically and currently won’t meet the criteria.

NUCLEAR

Constellation Energy on Tuesday announced a that it had entered into a 20-year power purchase agreement with Google. It will support the addition of 890 MW of new nuclear generation, to be added through uprates of 11 existing units in the PJM Interconnection. The units are located at a half dozen locations in Illinois, Pennsylvania, and New Jersey, with the first uprate expected online in 2028.

The nuclear deal will be backed by $4.3 billion in new investment by Constellation. The two companies also entered into a 15-year supply agreement for another 2,700 MW across the PJM market. This announcement follows a similar 690-MW deal which Constellation announced with Amazon. That plan is centered around a $3-billion, 190-MW expansion of the Calvert Cliffs nuclear plant in Maryland. That new capacity is expected to come online between 2030 and 2032.

ANN ARBOR UTILITY VOTES

Voter approval of a public power proposal on the Nov. 3 ballot in Ann Arbor, MI may not be the final word on efforts to establish a municipal utility in the city. City Council voted 10-1 this week, to direct the city attorney to challenge the legality of Proposal E and its revisions to the city charter “at the appropriate time.” In the interim, the Council and Mayor are undertaking an unusual effort to defeat the proposal.

The proposal states the board shall have powers to construct, acquire, expand, operate, study and maintain a utility system, enter contracts and acquire property. It also states the board shall recommend and the council shall authorize the borrowing of money for it. This has raised objections from the Mayor and Council that the transfer of ratemaking and financing approval to the proposed utility board is an unlawful diminution of the Council’s power.

STADIUM VOTES

Plano, TX voters will decide Nov. 3 whether to authorize up to five different taxes to help finance a proposed Dallas Stars (NHL) arena. They include a short-term tax on vehicle rentals in Plano at 5% of rental receipts; a hotel tax would be increased in Plano by an additional 2% of the room price, bringing the combined hotel tax rate to 15%. Taxes directly attributable to the arena include event parking at the venue at $3 per vehicle; event tickets at the venue at 10% of the ticket price: $5,000 per game on each member of a major league team playing a professional game at the arena.

The Kansas City, MO City Council is moving forward on legislation supporting a city contribution to the new KC Royals (MLB) stadium in downtown KC. Committee approval has been gained for a plan which recommended the issuance of approximately $600 million in bonds to pay the city’s portion of the $1.9 billion stadium. The plans rely on sales taxes and tax increment revenues derived from the stadium and surrounding area. The exact boundaries of the proposed tax increment district have not been finalized. The policy in that area will allow the city to use half the hotel tax and all of the food and beverage, earnings, public safety and parks sales taxes to help pay off the debt from stadium bonds.

TAR HEEL GAS TAX PAUSE

State lawmakers in NC voted nearly unanimously for a suspension of the state’s 41-cents-a-gallon tax. It will last until Nov. 30. The suspension is expected to lower direct transportation revenues by an estimated $360 million. Legislative leadership said the state will backfill that shortfall from an inflation reserve fund to avoid any disruption to road projects and maintenance. Previous efforts to enact such a suspension in the spring were decried as a “feel good” tactic by legislative leadership. What changed?

U.S. Bureau of Transportation (BTS) released September data showing that in September 2026, the average price for regular motor gasoline was $4.36 per gallon; up 7.3% from August 2026 and up 37.6% from September 2025. The average price for diesel no. 2, at $6.29 per gallon, reached a new all-time high in September 2026, up 9.3% from the previous all-time high reached in June 2022, up 15.2% from August 2026, and up 67.8% from September 2025.

WIND

A new report from the University of Missouri’s Center for Rural Energy Security shows wind and solar farms can bring economic gains to rural communities. The release comes as the siting and operation of renewable generation resources continues to be a hot-button political issue. The study compared economic factors in counties with renewable power plants and those without from the years 2001 to 2023.

The economic advantage of solar energy development in rural counties came to the utilities, construction and transportation sectors, which each saw 10% to 20% increases in employment and wages. The communities hosting wind energy infrastructure saw an increase in gross domestic product, or GDP, by approximately 7%. The report states that neither wind nor solar development were associated with declining agricultural GDP, employment or wages.

PORT OF LOS ANGELES

The reductions of tariff pressures since their peak earlier this year continue to show up in trade activity. One of our favorite economic indicators is activity at ports and there is no better indicator than the Port of Los Angeles. The Port of Los Angeles handled 1,042,652 Twenty-Foot Equivalent Units (TEUs) in September, the busiest month in its 118-year history and more than 20,000 units more than the previous monthly record set in July 2025.

Those shipments closed out a productive quarter for the port as well. Reflecting a trend which began in June, nearly 3 million TEUs moved across its docks from July through September. From June through September, the Port handled nearly 4 million TEUs, the strongest four-month stretch on record. During the first nine months of 2026, the Port handled nearly 8.1 million TEUs, more than 3% ahead of the same period last year.

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