Joseph Krist

Publisher

PREPA’s SUPER BOWL MOMENT

The sparking utility poles in Bad Bunny’s Super Bowl halftime show are not the optics Puerto Rico’s electric utility could have wanted. Eight and a half years after the legacy power system was wrecked, the effort to develop a modern reliable power system continues to face obstacles imposed from the outside. Service continues to be inadequate and unreliable. Utility customers in Puerto Rico experienced an average of 27 hours of power grid interruptions not related to major events like hurricanes per year between 2021 and 2024. By contrast, people living on the U.S. mainland lacked power for an average of just two hours per year, according to federal data.

In January, the Department of Energy canceled $450 million for grid resilience programs in Puerto Rico. The clawback effectively marks the end of the $1 billion Puerto Rico Energy Resilience Fund that the Biden administration launched in 2023. President Donald Trump’s DOE had previously redirected $365 million of that funding meant for rooftop solar and battery storage projects toward ​“practical fixes and emergency activities.” As of June 2025, 1.2 gigawatts of grid-connected rooftop solar were installed on homes and businesses, supplying more than 10% of the total energy used, according to the Institute for Energy Economics and Financial Analysis. 

WIND

Offshore wind in the Atlantic can move forward again after it was victorious in its challenge of the suspension of approvals. Dominion Energy‘s Coastal Virginia Offshore Wind (CVOW) project was the latest. Once operational, CVOW will consist of 176 wind turbines generating up to 9.5 million megawatt-hours per year, or enough energy to power up to 660,000 homes.

Total project costs for CVOW, inclusive of contingency and excluding financing costs, have increased from approximately $11.2 billion to approximately $11.5 billion. That $300 million change reflected the impact of the withdrawal of approvals. The offshore wind farm is now 71% complete. Dominion said that $9.3 billion has already been invested in the project as of Dec. 31, 2025.

On land, a federal judge has allowed the SunZia Wind project in New Mexico to resume construction. It is designed to generate 3,000 megawatts of wind power. To date, the focus of opposition has come from plans to construct a high voltage transmission line to distribute power from the project. The project had completed its Bureau of Land Management environmental impact statement and received its Record of Decision prior to the announcement of the new policies of the new administration. The SunZia Transmission project is a 550-mile transmission line which will connect New Mexico’s wind resources to Arizona and California markets.

OHIO POWER GAMES CONTINUE

Ohio has become notorious for its legislative actions to try and save the coal industry. Previous efforts led to the conviction of, among others, the Speaker of the Ohio House. As a matter of fact, the former Speaker is facing another trial this summer on corruption charges linked to efforts to support coal generation. Two First Energy executives are on trial for bribery as this goes to press. That isn’t stopping the consideration of a bill (S.B. 294) written by the conservative American Legislative Exchange Council (ALEC).

The bill declares it to be Ohio’s public policy to ensure affordable, reliable, and clean energy in all applications for a utility facility certificate. It requires the Power Siting Board, when reviewing applications for electric generating facilities, to consider the use of affordable, reliable, and clean energy sources; prioritize domestic energy production (i.e., using a fuel source that is primarily produced in the United States); and minimize reliance on foreign adversary nations for critical materials or manufacturing.

It may increase the likelihood of approvals for future applications for a certificate from the Power Siting Board, particularly for projects using energy generated from sources such as natural gas, biomass, nuclear reaction, hydrocarbons that meet Environmental Protection Agency air quality standards, and renewable energy. SB 294’s definition of a reliable energy source would require it to be ​“readily available” with minimal interruptions during high-usage times and for it to have a 50% capacity factor. That’s the ratio of its actual power output to the potential maximum. This condition would exclude virtually all land-based wind and solar generation.

DATA CENTERS

In Virginia, legislation has been introduced which would allow the State Corporation Commission (SCC) to determine if it is in the public’s interest for large-load customers instead of residential ones to cover the cost of distributing power to data centers. If the SCC approves, those costs could shift to new and existing data centers through 2033. The SCC estimated that typical residential customers will see their rate reduced by 3.4%, about $5.52 monthly, and the data center customers’ rate will increase by a projected 15.8%. 

In Kentucky, proposed legislation would only allow large data centers to have electric service from a public utility if they sign a contract agreeing to cover any transmission or infrastructure costs attributable to serving that data center. State regulators at the Public Service Commission would also have to approve the terms of the contract and related tariffs. The data center must certify that it will comply with all local and state requirements related to its operation if it is to remain eligible for the existing state tax incentives, which grant a 50-year exemption to all sales and use taxes on computer equipment at large data center developments.

In West Virginia, a different approach is being suggested. There, a proposal would allow businesses investing at least $2.5 million or creating 10 jobs to receive a tax credit, or reduction in their state tax bill for a decade. But job creation is not a requirement. And the bigger the investment, the larger the credit. This proposal follows legislation which was enacted in 2025 effectively stripping away the ability of local government to regulate data centers. In that legislation, lawmakers sought to bolster state revenues by seizing the property tax revenue that data centers generate (which normally gets directed to local public services and school districts) and diverting it to a state fund to help replace the state’s income tax.

A bill has been introduced in the Colorado legislature which would require large data center operators to build or purchase enough renewable energy to cover their annual electricity usage beginning in 2031. By the same year, those developers must enter formal contracts with utilities lasting at least 15 years to cover the cost of any grid upgrades necessary to deliver reliable power to the facilities. 

In Washington, a pending bill requires utilities to establish a tariff or policy for data centers by 2027, to ensure the centers cover the costs utilities face in supplying them with enough power. The idea is that those added costs aren’t passed on to other ratepayers. The legislation also calls for data centers to curtail electricity use when the grid is strained, and to take other steps to manage the demand they put on the grid. Additionally, data center operators would be required to share a sustainability report, information on server cooling technology and data on water and energy use and emissions. 

NEW ORLEANS

Moody’s has downgraded the City of New Orleans, LA’s issuer rating, general obligation unlimited tax (GOULT) and general obligation limited tax (GOLT) ratings to Baa2 from A3.  The outlook was changed to negative from rating under review. Moody’s cited the city’s very limited financial position, supplemented by cash flow borrowing, with additional declines in reserves projected for fiscal 2025. 

The downgrade comes as a new Mayor took office. It is acknowledged that the new administration has budgeted for balanced operations in fiscal 2026 supported by the implementation of various staffing reductions, the projection of additional revenues, and receipt of pending receivables. The downgrade so early in efforts to undertake what will clearly be a multi-year process of fiscal recovery complicates recovery efforts. It is as much a statement on the faults of the outgoing administration as it is on their comfort level with city government going forward.

MASS TRANSIT

The Dallas, TX City Council approved a proposed governance framework that would shrink the city’s voting power on the Dallas Area Rapid Transit (DART) board to at least 45%. That would mean that for the first time in the agency’s more than 40-year history that Dallas would no longer hold majority control. The plan also would guarantee each of DART’s 13 member cities at least one board seat, replacing a structure that now gives only Dallas, Irving, Garland and Plano dedicated single-city representation, and would likely expand the current 15-member board.

The goal is to try to persuade six cities – Addison, Farmers Branch, Highland Park, Irving, Plano and University Park – to end an effort to hold May elections that could let voters decide whether to withdraw from DART. The six cities have until late February to finalize their special ballots and until March 18 to rescind their election plans altogether. It’s a split between suburban users of systems – transit and utilities – and users within the jurisdiction of the city which owns or sponsors a utility seen in many places.

ESG WIN IN COURT

A federal district judge declared a 2021 law restricting state investments in companies boycotting the fossil fuel industry unconstitutional, calling it “facially overbroad” and citing First and Fourteenth Amendment concerns. The law requires the comptroller’s office to maintain a list of financial firms that refuse, terminate or penalize business with a fossil fuel company “without ordinary business purpose.” The Texas Comptroller’s office maintains a publicly available list of more than 300 companies they identified as boycotting energy companies, which was last updated in June.

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