Transition Finance Weekly - January 16, 2026

Pritzker’s Progress; Solar over Coal in Texas; Climate Costs Drive Action in Washington

BREAKING:

Today, a coalition of mid-Atlantic governors will be at the White House to unveil a deal to limit energy prices in PJM. The plan reportedly includes a two year price cap on future auctions and requirements for new data centers to pay for a greater share of the costs of expanding the grid.

1. Battery Storage is Coming To Illinois

The Clean and Reliable Grid Affordability Act (CRGA) is now law in Illinois, unlocking battery storage, new tech, and lower costs for Illinoisans.

• Last Friday, Governor JB Pritzker signed the CRGA, a sweeping clean energy and affordability bill that sets a 3 GW target for battery storage in the state. The bill builds on previous legislative victories including the Climate and Equitable Jobs Act, which set Illinois’s 2021 RPS targeting 100% clean energy by 2050.

• The bill also removes the state’s moratorium on nuclear development, explicitly incentivizes and encourages energy efficiency, and, importantly, requires utilities to develop virtual power plants.

• An analysis from the Illinois Power Agency estimated that the bill would save consumers $13.4 billion over 20 years, a massive relief to consumers as they face rising electricity costs.

Governor JB Pritzker, at the signing ceremony, said: “In Illinois, we are pursuing every available option to produce affordable, efficient, clean, and abundant energy. We are leaving no stone unturned in the work to produce more electricity, lower prices for our people, and secure our long-term energy future.”

2. A 2025 First: More Solar Than Coal In Texas

A new solar milestone in Texas is a glimpse of the future, yet nationwide, an uptick in coal generation helped drive US emissions growth.

• In 2025, for the first time, solar surpassed coal on Texas’s electricity grid. Renewables, as a whole, supplied 37% of all electricity in Texas, a significant milestone in the country’s fossil capital.

• Nationwide, however, coal consumption was up 13%, reversing a two-year declining trend in emissions reductions. The rise in coal didn’t come from new plant openings: existing plants were run at higher capacity as energy demand increased and the price of natural gas skyrocketed, making coal more economically attractive. Also extending the burn: the Trump Administration’s efforts to force aging coal plants to stay online in Colorado, Indiana, and Michigan, actions that are expected to drive up costs for residents.

• The bump in coal’s net generation in 2025 serves as a reminder that policymakers must address both clean energy growth and fossil fuel transition to meet pollution reduction goals, especially in a time of increasing electricity demand.

  

3. Restricting the Proxies: State Legislators Introduce Anti-ESG Bills

Modeled on Texas’s efforts to constrain and punish proxy advisors, some states are again proposing to restrict investor oversight as anti-ESG proposals evolve another year.

• In Nebraska and Indiana, lawmakers have introduced bills to heavily restrict how proxy advisors can work to inform their clients and investors, similar to Texas’s SB 2337 from 2025.

• The Texas law, now blocked due to ongoing litigation from nonprofits and proxy advisor firms, would have prohibited proxy advisors, research services, and nonprofits from providing accurate, robust information on shareholder proposals, and would require them to risk significant legal liability for providing clients with customized recommendations.

  

4. California Regulator Backs Flexible Interconnection

On Christmas Eve, California regulators advanced new policy to increase grid utilization.

• Public Utilities Commissioner Alice Reynolds proposed in December a new rule to require PG&E and SCE in California to enable flexible service connections, allowing new loads to safely connect to the grid more quickly while awaiting infrastructure upgrades.

• The change will reduce the potentially project-ending ramifications of loads stuck awaiting distribution system upgrades by allowing flexible loads to interconnect where and when capacity allows. The changes will allow California to unlock more of its grid capacity, as flexibility enables more customers to take advantage of existing generation and infrastructure.

• California regulators noted in the draft order that “Ultimately, parties are not aware of any standardized, scalable processes in the United States that California can look to for learnings.”

Google’s Tyler Norris commented: “2025 was the year this started to change.”

5. Beyond the Headlines: Meta’s Energy Strategy

On the subject of powering new data center loads, zero carbon headlines can mask a more complex resource picture.

• Meta grabbed headlines this week as it announced that it would “unlock” up to 6.6 GW of nuclear energy to power its data centers. But its newest announcement contains details that matter: Meta’s deal includes the purchase of 2.1 GW of existing nuclear capacity — and counts a large amount of energy that is unlikely to come online for years.

• Meanwhile, Meta is building 2.25 GW of natural gas generation for a 5 GW data center in Louisiana, new fossil fuel infrastructure that locks in long term costs and pollution.

Princeton’s Jesse Jenkins wrote: “When hyperscalars contract with new clean, hourly-matched, deliverable supply, we should laud their efforts. When they try to side-step those responsibilities and take the easy way out by signing up for existing generation, we should all be deeply concerned.”

6. Washington State Picks Up Policies to Address Insurance Affordability and Wildfire Risk

In Washington, Insurance Commissioner Patty Kuderer unveils her legislative package — and seeks to address climate risks.

• Washington Insurance Commissioner Patty Kuderer’s new 2026 legislative priorities broadly seek to address the rising costs and risks of climate change as they hit Washington’s insurance market.

• Her priority bills include bipartisan bills HB 2277 and SB 5928, which would require insurers to disclose fire risk scores and provide information on how to improve the score. The bills are similar to 2025’s HB 1182 in Colorado, which also require premium discounts for physical risk mitigation at the property level.

Commissioner Kuderer said: “I’ve always seen consumer protection as a key element of insurance regulation, and my priorities this year reflect that. I’m excited to work with our state lawmakers to help protect our people, their home coverage and their health insurance rights.”

SPOTLIGHT: Microsoft Moves to Define Community-First AI Infrastructure

In response to growing local backlash to data center growth, Microsoft has announced what it is calling a “Community-First AI Infrastructure Plan” to set a new benchmark for how technology companies will work with communities as they build computing infrastructure. On electricity specifically, Microsoft is pledging to pay high enough rates to “cover the electricity costs” of their data centers, work with utilities to add new generation, pursue efficiency in data centers, and advocate for sustainable generation.

This plan puts a stake in the ground for other hyperscalers. It stands to be seen what Microsoft’s principles will look like in practice, but it’s a significant step in a field that has thus far seemed to ignore broader impacts and their corporate climate commitments.