Transition Finance Weekly - February 5, 2026
Texas Anti-ESG Law Unconstitutional; Expensive Coal Extension; Minimal Viable Scale
1. Texas ‘Fossil Fuel Boycott’ Law Unconstitutional
Yesterday, a Federal Court struck down SB13, the Texas law that blacklists companies the state accused of “boycotting fossil fuel companies.”
In a pointed ruling, the U.S. District Court for the Western District of Texas in Austin struck down SB13 on grounds that it violates both the First and Fourteenth Amendments of the US Constitution.
The lawsuit against SB13 was brought in 2024 by the American Sustainable Business Council, acting on behalf of members including Etho Capital and Sphere for the law’s violation of its members’ free speech and association rights.
S.B. 13 functioned by creating a blacklist of companies that, at various points, included major financial firms that invest heavily in fossil fuels, including HSBC, BlackRock, BNP Paribas, and individual funds at Goldman Sachs and J.P. Morgan Chase. The arbitrary nature of these blacklists, which fall under the discretion of the state comptroller, was explicitly named by Judge Albright, a Trump appointee, as vague enough to violate the 14th Amendment.
As our legislative tracking shows, twelve states have passed 17 laws resembling model bills directly based on S.B. 13. Anti-ESG laws proved to have cost retirees, investors, and businesses billions in Texas, Oklahoma, and other states — and now have been named unconstitutional to boot.
Pleiades’ Frances Sawyer: “American companies must be able to respond to the opportunities embedded in the energy transition and reckon with the material costs of climate-change, including extreme weather. S.B. 13 tried to prevent their ability to engage with these real risks, costing Texans billions and leaving retirees with the bill. This ruling is a win for business leaders who want to reckon with reality to protect their bottom lines — and all people living with the consequences of investment decisions that will shape our future.”
2. Pritzker Renews Push for Insurance Oversight
Illinois Governor JB Pritzker is pushing for more state rate oversight as insurance costs skyrocket in Illinois and across the country.
Governor JB Pritzker is bringing back legislation to give Illinois regulators the ability to review insurers’ rate increases after they are implemented and allow them to require consumer refunds in the event that rate hikes are “unfair or excessive.”
Pritzker called for legislation to do the same during last year’s end of year veto session after State Farm filed to increase rates by a whopping 27%. Pritzker’s bill failed after significant pushback from insurance companies.
Insurers claim that higher replacement costs and increasing climate-driven events require them to raise rates. Insurance rates are, for many, one of the most visible climate-driven costs to Americans.
However, as industry profits are reaching new record highs, it is up to regulators to look hard at their approach and understand that insurers can’t simply rate hike their way to stability in a changing climate. Policymakers have to approach the issue holistically, returning again and again to actual climate risk mitigation efforts, including climate-smart infrastructure, stronger building codes, and emissions reductions.
Illinois Governor JB Pritzker, in a letter pushing back on claims from State Farm, said: “There is no enforceability by the state, no consequence to the insurance company, and no accountability to consumers. That’s just not fair.”
3. Tri-State Doesn’t Want Costly Craig Coal
The Colorado G&T is arguing that the administration’s order keeping the coal-fired Craig Generating Station open is unconstitutional and costly for member-owners.
In a petition to the Department of Energy, Tri-State Generation and Transmission Association and Platte River Power Authority formally objected to the administration’s order keeping Craig’s Unit 1 power plant open. Colorado Attorney General Phil Weiser and environmental groups also petitioned the Department of Energy to rescind the emergency order.
Since 2016, Tri-State has planned to retire Craig’s Unit 1, a highly inefficient and aging coal-fired generator, at the end of 2025. Unit 1 alone emitted more than 2 million tons of CO2 in 2024, has been plagued with operability issues, and requires extensive costs just to keep running.
Keeping it open doesn’t make economic sense: Unit 1 would cost $85 million per year to run, and the limited transmission capacity in Northwestern Colorado means that running it could mean the utility may have to curtail a nearby 145 MW solar farm, which now produces power without any fuel costs, unlike Craig.
Tri-State CEO Duane Highley, on the petition for rehearing: “We do not take this request for a rehearing lightly, but as not-for-profit entities, we face issues that other utilities do not, because it is our members that ultimately are going to pay for the cost of this order.”
4. Virginia Legislators Look To Ease Local Approval of Solar
A new bill by Sen. Schuyler VanValkenburg and Rep. Charniele Herring would stop local governments from banning all solar development.
Virginia legislators are currently considering a bill that would make it easier for solar developers to get local approval for their projects, and prohibit local governments from banning solar development entirely.
The bill includes a set of best practices for solar development for local governments to adopt as a framework for solar development, including panel height, grading, decommissioning, and setback requirements.
The Senate recently approved SB 347 by a vote of 21-17, and the bill awaits committee action in the House of Delegates.
Sen. Schuyler VanValkenburg said: “One of the big complaints has been that there are solar developers who come in and don’t do it the right way. And so this lays out kind of basic guidance about what the right way might look like.”
5. Colorado Weighs Data Center Bills
In Colorado, legislators are considering two very different bills to handle data center development — one to encourage data center development, another to shape their impact.
Colorado legislators are considering two different bills on data centers, both introduced by Democrats. One backed by the data center industry would provide a 20-year exemption from state sales and use taxes to data centers that meet certain standards. Separately, another bill would require developers to match their energy demand with new clean energy, and pay for the full cost of their facilities.
The industry-backed bill would provide sales tax exemptions to data centers that commit to a $250 million minimum investment, create high-paying jobs, and have a cleaner backup power source than the EPA’s current standards. The other bill, introduced by State Senator Cathy Kipp, would prohibit utilities from serving data centers if it would cause their emissions to rise or impact their ability to serve other customers.
Colorado legislators in recent years have already rejected multiple efforts to subsidize data centers in the state.
6. Power Politics of Affordability
In an interview with WABE, Tim Echols reflected on his tenure at the GA PSC, and reiterated his support for clean energy.
In interviews before leaving office, outgoing Georgia Public Service Commissioner Tim Echols, who lost in a cataclysmic race in November to Democrat Alicia Johnson, reiterated his support for clean energy, particularly for nuclear energy.
Echols defended Plant Vogtle, despite its significant role in his loss in November. Rates rose significantly as the costs of the plant ballooned, which Echols continued to defend. Echols also emphasized that fossil plants will “close one day,” to be replaced entirely by zero emission energy in the future.
The Commission’s two new Democratic commissioners ran on platforms that supported both new clean energy as an economic driver and a strong focus on lowering bills for families.
Outgoing Commissioner Tim Echols: “Moving towards solar, batteries and nuclear is the way of the future. And I think we will eventually go that way. Those coal plants will close one day, and those gas plants will close and what will remain will be nuclear energy and renewable energy in Georgia.”
SPOTLIGHT: “Minimal Viable Scale” & Transition Planning
In a new paper, University of Notre Dame researchers Emily Grubert and Josh Lappen spotlight an important reality: the energy transition will not likely be linear, particularly in the phasing out of fossil fuel infrastructure.
Grubert and Lappen argued that current transition planning and policy provide significantly less attention to managing aging and declining fossil energy infrastructure, including refineries, fuel stations, pipeline systems, and more, than it gives in attention to spurring clean energy deployment. These facilities are embedded in complex supply chains and knowledge systems that, as demand for fossil fuels decreases, will hit financial, managerial, and physical constraints that will, in turn, shape the politics of the energy transition.
The paper notes: “As demand for fossil fuels stagnates or declines, these economies of scale will invert, leaving shrinking user bases to carry growing liabilities, and infrastructure designed for expansion to instead weather contraction. Ensuring that fossil energy systems can continue to provide necessary services to remaining users until replacement systems are ready, even as they shrink, is critical not only for completing the energy transition, but also for doing so safely and justly.”
