Tax credit whiplash

 07/21/2025

Good morning and welcome to the weekly Monday edition of the New York & New Jersey Energy newsletter. We’ll take a look at the week ahead and look back on what you may have missed last week.

TAX CREDIT WHIPLASH — POLITICO’s Marie J. French and Ry Rivard: The accelerated phaseout of federal tax credits for clean energy has increased uncertainty for state efforts to bolster renewables.

States are delaying procurements of new renewables, including offshore wind and solar, as they evaluate the energy impacts of the One Big Beautiful Bill Act. Energy experts and policymakers expect consumer costs to be higher due to policy changes in the GOP megabill.

“Those costs will certainly increase, not just from short term supply shocks and the loss of federal tax credits but also from the uncertainty,” said Julia Hoos, an energy analyst with Aurora Energy Research.

Why it matters: New York, New Jersey and other Northeast states have ambitious renewable energy goals. Democratic leaders were already signaling delays in meeting them after rising costs led to canceled contracts before President Donald Trump’s election, but the looming end of federal support elevates the uncertainty and potential for missed milestones.

“These goals were based on, predicated on, offshore wind and solar really emerging as primary energy sources,” Gov. Kathy Hochul told reporters on July 11. “But I have to deal with the reality that with a president that’s hostile to those interests — and has told me directly that — how do we pretend that the goals will be met when all the incentives to invest in those industries has dissipated?”

PJM TO HEAR FROM GOVERNORS — POLITICO’s Ry Rivard: The embattled operator of the nation’s largest electric grid agreed to hear from concerned governors’ offices next week following a bipartisan letter from state leaders questioning whether it has its act together.

In recent days, 10 governors, including three Republicans, have questioned the direction taken by PJM Interconnection LLC, which runs the grid and energy market for 13 states and Washington, D.C.

PJM board Chair David Mills said Friday the grid operator would make time at the July 23 PJM Members Committee meeting to hear from the governors’ representatives, who are expected to urge the grid operator to fill two seats on its nine-seat board with people handpicked by the states.

On Wednesday, the governors of Delaware, Illinois, Kentucky, Maryland, Michigan, New Jersey, Pennsylvania, Tennessee and Virginia told PJM it is facing an “unprecedented crisis of confidence.” On Thursday, Ohio Gov. Mike DeWine, a Republican, sent PJM a separate letter saying he supported his fellow governors’ position. While blue states have long criticized PJM, the bipartisan criticism is perhaps the most serious political threat to PJM in its decades of existence.

In a letter to governors, Mills — a former energy industry executive and consultant — defended his organization’s record and said PJM is keeping the lights on “through some of the most challenging circumstances that any grid operator, anywhere, has faced.”