Transition Finance Weekly - 8/15/2025
Counties Take the Hit, AZ Utility Backs Off on Promises, VPP “Generation” Is Here
Exploring the policy, politics, and economics of the clean energy transition
Each week here in Transition Finance Weekly, researchers and analysts from Pleiades Strategy summarize the top stories and trends related to the policy, politics, and economics of the clean energy transition in the states.
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Breaking: In a win for climate risk transparency, a Northern California Federal court has denied the U.S. Chamber of Commerce’s motion to preliminarily block the implementation of California’s nation-leading climate disclosure laws while their lawsuit continues.
1. Counties Brace for Fiscal Fallout from Federal Cuts
New report: States, counties, and cities could be on the hook for $1 trillion.
The National Association of Counties (NACo) has released an analysis of how the GOP’s ongoing assault on the federal budget, especially via cuts in the reconciliation bill, is dumping financial and administrative burdens on local governments.
These cuts come as climate-driven extreme weather is making local infrastructure delivery harder and more expensive. And now, thanks to federal cuts, counties will have to cover a much larger share of everything from disaster recovery to public health and emergency services.
One of the biggest blows? The cancellation of FEMA’s BRIC program, which once provided up to $1 billion annually in critical pre-disaster mitigation dollars for stormwater upgrades, wildfire prevention, and flood protection. Investments like those are not a waste of taxpayers’ money; they always, always pay off over time.
2. REST in Peace, Arizona Renewables
The state was an early clean energy leader, but things aren’t looking good.
A critical 5-0 vote yesterday at the Arizona Corporation Commission kicked off a formal repeal of Arizona’s Renewable Energy Standard and Tariff (REST) policy, setting up the state to be weak on energy, costly for residents, and harder for business. The big winners: investors in Pinnacle West, APS’s parent company, and methane gas executives.
Way back in 2006, the nation’s sunniest state passed then-aggressive (now very weak) 15% renewable energy targets at the Arizona Corporation Commission, which drove the adoption of rooftop solar, led to at least $11 billion in solar investments, and saved ratepayers $2 billion. Already paltry, regulators opted today to time travel back to 2006 in repealing the standard.
Also this week: Arizona Public Service (APS), the state’s largest electric utility, shocked regulators and clean energy advocates by scaling back its climate goals, on a public earnings call. APS has been claiming a voluntary commitment to zero emissions by 2050.
Autumn Johnson of the Arizona Solar Energy Industries Association: “APS is walking away from every clean energy promise it made to the public, to regulators, to shareholders, and to the communities it serves. We are left with vague intentions and zero accountability.”
3. Texas Taxpayers Pony Up for More Gas Generation
In 2025, Greg Abbott is handing over $216 million of public funds to build a 20th-century plant.
Last week, as he pushed his gerrymandering plan to secure Trump-friendly congressional seats in 2026, Texas Gov. Greg Abbott also announced the largest loan yet from the Texas Energy Fund: $216 million, at preferential rates, to support a 456 MW gas plant in Houston. The plant will lock in fossil infrastructure for decades, and it comes as extreme heat repeatedly pushes the state’s fragile grid to the brink.
Texas could be fully leading the world on clean energy (it has the money, the sunlight, and the corporate heft), but its leaders keep doubling down on yesterday’s fuels — with its citizens’ money.
The energy fund, a fossil-fuel corporate welfare project, has found it hard to give away its $5 billion in funding; 8 projects dropped out this spring, and Citi analysts said the fund was “falling apart.”
4. St. Charles Says NO to Coal-Reliant Renewal
With IMEA seeking early contract renewals to lock municipalities into expensive coal, this Illinois town says “no thank you.”
This week St. Charles, Illinois, rejected a 20-year contract renewal, and is planning to pursue alternative cleaner energy sources for their supply instead.
The Illinois Municipal Electricity Agency (IMEA) is a joint action agency that owns significant shares of Illinois’ Prairie State Energy Campus, a coal facility that ranks in one of the top ten U.S. polluters, and part of the Trimble County Generating Station in Kentucky. Prairie State plans to continue operations until 2045, Trimble until 2050.
IMEA has been seeking early renewal of its long-term contracts with the municipalities it serves in order to lock in buyers for their dirty and costly energy supply in a rapidly changing energy landscape.
Alderpersons Mike Foulkes: “….We made a very logical decision, this contract at this moment today was not in the best interest of the city of St. Charles. There’s no doubt about that.”
5. New York Finalizes Nation’s First All-Electric Building Code
No new gas in most new buildings, starting next year.
New York’s All-Electric Buildings Act is officially moving forward. The state’s Building Code Council just finalized the rules required by a 2023 law, making New York the first state to bake electrification directly into building codes.
The requirements apply to most new buildings under seven stories starting in 2026, and to larger buildings in 2029. “All-electric” means no new fossil fuel hookups for heating or cooking, a key move in cutting building sector emissions — which will also reduce building costs.
Gas lobbyists tried to kill the policy in court. They failed. But the law still includes exemptions for renovations, gas appliance replacements, and certain industries, loopholes that advocates warn could slow progress.
Buildings represent 31% of New York State’s contribution to global warming. Brooklyn Assemblymember Emily Gallagher, who sponsored the law in 2023: “I’m excited that we are finally tackling, statewide, our largest source of fossil-fuel emissions.”
SPOTLIGHT: VPPs Are the Future, And the Future Just Arrived!
On July 29, 2025, California quietly tested the future of energy, and it worked.
According to a new Brattle Group report, several virtual power plant (VPP) aggregators coordinated a statewide battery discharge between 7 and 9 p.m., delivering an average output of 535 MW. That’s equivalent to a large hydro dam or half a nuclear reactor — and bigger than the new Houston gas plant Gov. Abbott is sponsoring — and it all came via distributed batteries in homes and businesses, and mostly originally from renewable sources.
Let that sink in: No new gas plants. No blackouts. Just smart coordination of existing assets. In the new world, VPPs are critical infrastructure — and they work.
The clean grid transition isn’t waiting for permission. And VPPs? They’re already here.
