Powering the Economy: Generation Innovation, Grid Optimization, and Energy Efficiency

The Environmental and Energy Study Institute (EESI) and the National Association of State Energy Officials (NASEO) held a briefing about state-led energy solutions to meet rapidly increasing power demand needed to grow America’s economy, support energy security and resilience, and put downward pressure on electricity costs. 

Attendees heard from State Energy Office leaders about the 11-state Advanced Nuclear First Mover Initiative, 13-state Geothermal Power Accelerator, hydropower, advanced transmission reconductoring and grid optimization, and energy storage. Panelists discussed energy efficiency solutions that are lowering energy bills for consumers and businesses, and the latest on state energy security initiatives designed to improve reliability and speed the recovery of energy systems following physical, weather, and cyber incidents. Speakers highlighted key federal policies that can help states in their efforts to catalyze energy innovation and address energy affordability.

Highlights

KEY TAKEAWAYS

State energy offices support governors and legislative bodies in their respective states by developing plans, policies, and programs, and working on energy production and delivery. Every state energy office relies on annual formula funding from the U.S. Department of Energy State Energy Program. Energy efficiency programs such as home energy rebates, energy saving performance contracting, and the Weatherization Assistance Program, are important federally-supported, state-led initiatives that drive affordability.

 

Molly Cripps, Director, Tennessee Department of Environment and Conservation (TDEC) Office of Energy Programs (OEP); Chair, NASEO Board of Directors

• State energy offices support governors and legislative bodies in their respective states by developing plans, policies, and programs, and working on energy production and delivery.
• Every state energy office relies on annual formula funding from the U.S. Department of Energy State Energy Program. Congress appropriated $66 million to this program in fiscal year 2026.
• Tennessee’s energy office is working alongside the governor’s office and the Department of Economic and Community Development to lead the response to DOE's request for information on hosting a nuclear lifecycle innovation campus.
• Winter Storm Fern is still impacting communities across Tennessee. At the height of the impacts, 360,000 residents were without power. As of this briefing, Tennessee still had roughly 4,800 customers without electricity, which is unprecedented for the state.
• DOE Assistant Secretary Audrey Robertson stated that Tennessee’s coordinated response to the storm was remarkable, made possible by the flexibility of the State Energy Program and years of preparation in energy security.
• The SECURE Grid Act (H.R.7257), aims to strengthen the energy security and grid planning elements of the State Energy Program.
• On federal permitting reform, key principles include speeding federal permitting, continuing environmental protections, ensuring permitting certainty, and investing in technology-neutral processes.
• NASEO and state energy offices are collaborating with the private sector and DOE on innovative efforts, including the advanced nuclear first mover initiative and the geothermal power accelerator.

 

Will Toor, Executive Director, Colorado Energy Office

• For the last 20 years, despite population and economic growth, Colorado’s electricity demand has grown less than 0.5% annually because of advances in energy efficiency.
• In the past 10 years, electricity rates have increased below the rate of inflation; however, recent spikes in prices have occurred, driven by limitations of the transmission and distribution systems.
• Colorado has an aging grid infrastructure and also faces extreme weather events like wildfires, which can cause blackouts. Wildfire conditions are occurring more regularly so transmission systems need to be resilient. They also need to be insulated so that they do not spark wildfires themselves.
• These infrastructure upgrade costs are spread over relatively fixed electric demand, which means they are starting to drive up costs. The Colorado energy office is focused on trying to understand these cost pressures. One significant recent finding is that, depending on the place, energy load growth can be beneficial.
• If there is load growth in an area like Denver, where there is already a lot of demand and transmission constraints, then costs are high. However, if there are new loads near retired coal plants, for example, then the pre-existing transmission infrastructure can be used at very low incremental cost.
• If load remains flat for the next 25 years, the Colorado energy office predicts a 50% increase in electric rates. However, if the state is strategic about where growth takes place and load flexibility, then rate increases can be kept to the rate of inflation because no new infrastructure will be needed.
• Governor Jared Polis ordered state agencies to create a strategic electrification approach to decrease costs and greenhouse gas emissions while taking into account new large energy loads (such as data centers), the deployment of electric vehicles, and developments in energy transmission.
• Using federal funding, the Colorado energy office analyzed projected future electricity demand and found that the lowest cost energy came from a mix of investments in wind, solar, batteries, and natural gas combustion. This would minimize the cost of generation and reduce pollution by 95% by 2040.
• Additionally, geothermal energy is seen as an important emerging energy source. Colorado has a geothermal grant program, state-level production and investment tax credits, and a significantly reformed permitting framework to further support geothermal development and well creation. 

 

Kristofor Anderson, Director, Energy Resources Division, Georgia Environmental Finance Authority

• The Georgia Environmental Finance Authority (GEFA) funds energy, land, and water conservation programs for the state as well as water infrastructure programs. The energy office operates the Weatherization Assistance Program and the State Energy Program.
• GEFA is working on low-interest revolving loan funding for natural gas infrastructure with a focus on rural, industrial manufacturing, and under-connected areas.
• The GEFA-led Emergency Support Function 12 coordinates the state’s natural disaster energy response across government, utilities, fuel companies, pipelines, and the industrial sector.
• GEFA also coordinates with neighboring Southeastern states to manage disaster response related to energy infrastructure. GEFA holds energy-specific exercises, made possible by State Energy Program funding, that bring together regional energy stakeholders to work through scenarios in which the electric grid and natural gas infrastructure are dramatically impacted.
• The federal State Energy Program supports states in developing and updating state energy security plans.
• The Infrastructure Investment and Jobs Act (P.L. 117-58) and other legislation provide funds to improve grid resilience. This includes line upgrades, physical infrastructure upgrades, vegetation management, and grid outage management. This takes a significant financial burden off of smaller utilities and rural electric cooperatives.
• GEFA and Georgia’s rural electric cooperatives have obtained a $250 million Grid Resilience and Innovation Partnership federal award with that will be used for transmission line upgrades and battery storage.
• Energy efficiency programs such as home energy rebates, energy saving performance contracting, and the Weatherization Assistance Program, are important federally-supported, state-led initiatives that drive affordability.

 

Amanda McClinton, Executive Director, Louisiana Department of Conservation and Energy

• In January 2026, Louisiana Governor Jeff Landry introduced the state’s new energy strategy.
• When looking at the whole of Louisiana, one singular strategy does not work. A diverse set of approaches is needed to tailor to a range of economic regions in the state.
• In 2024, Governor Landry announced that Louisiana would lead a new era of nuclear innovation. Since then, the state has worked across agencies to develop a nuclear strategy framework, which will be launched in March 2026. Louisiana will provide DOE with information on nuclear energy innovation and funding.
• Louisiana is one of 11 states joining NASEO’s Advanced Nuclear First Mover Initiative to refresh old regulations related to energy.
• Louisiana's Department of Conservation and Energy is working alongside Oak Ridge National Laboratory to analyze the impact of upcoming data centers on energy affordability and reliability. As of February 2026, there are plans to build 15 power-intensive data centers in Louisiana.

 

John Williams, Chief Policy Officer, New York State Energy Research and Development Authority (NYSERDA)

• The State Energy Program supports NYSERDA with its energy planning by providing states with resources to explore future energy outlooks and to collaborate with each other.
• New York’s state energy planning process brings together 14 state agency commissioners to coordinate on topics ranging from economic development to health and labor. This approach informs New York’s 15-year state energy plan.
• New technologies the state is considering as part of its long-term planning will not get off the ground without federal support, which requires collaboration between state and federal governments.
• A key to energy affordability is energy efficiency. Robust energy efficiency programs at the state level---supported by the federal government—help consumers manage their energy costs.
• United States-based supply chains for energy resources help bolster economic development and allow for better long-term planning.
• Technologies such as long-duration energy storage, hydrogen, and biofuels need state and federal support in order to expand commercialization.
• Reducing pollution and greenhouse gas emissions is still the central focus of New York's energy work through partnerships, policy, and innovation. 

 

Janine Benner, Director, Oregon Department of Energy

• Oregon’s Department of Energy puts out reports for the state legislature and the public on energy, such as its Biennial Energy Report.
• Oregon produces hydropower, wind, and solar energy, and imports most of its fossil fuels, which primarily go to the transportation sector.
• Most of Oregon’s electricity resource mix comes from hydropower. Some nuclear power is transmitted from Washington State, as Oregon does not have any nuclear plants. Wind and solar production are increasing yearly. Oregon's last coal plant was demolished in 2020, but coal will not be fully phased out of its electricity mix until 2030.
• Electricity use will increase steadily in Oregon until 2050, according to projections, due to electrification and growing loads from data center use. Overall energy use, however, will decrease by 22%, in part because electrification is a form of energy efficiency.
• A deep dive into the cause of increasing electricity rates found that rising power costs, ongoing infrastructure needs, inflationary pressure, and damage caused by extreme weather all contributed to rising energy bills.
• A 2024 Technology Review on geothermal energy reveals Oregon’s immense potential in the area. An enhanced geothermal system demonstration project is underway at Newberry Crater.
• Oregon’s Energy Security Plan, funded by the federal State Energy Program, addresses vulnerabilities in the state energy supply system.
• Oregon has a set of five broad pathways and 42 legislative and policy actions to reach a reliable, affordable, and clean energy grid. The first pathway is advancing energy efficiency across sectors, including transportation. The second is securing reliable, affordable, and clean energy. The third is increasing electrification across sectors. The fourth is advancing low-carbon fuels in the areas that are hardest to electrify. The fifth is strengthening resilience across the grid to better withstand climate change and other disasters. 

 

Q&A

 

Q: Are there topics relating to energy and electricity that deserve more attention but are not attracting national headlines?

Toor

• The role of energy efficiency is important, but federal conversations tend to revolve around building new energy infrastructure.
• Energy efficient technologies are the lowest cost resources available, and they have enormous impacts. Colorado’s switch to LED lighting in the last 25 years has helped keep the state's electricity use growth rates at 1.5% less than its economic growth rates.
• As Colorado moves towards developing the first advanced geothermal power projects, mechanisms are needed to de-risk the initial drilling process—including exploratory drilling to study geothermal reserves—and the investment in initial production wells. The federal government can invest in geothermal development to build knowledge and bring costs down.

Anderson

• Energy load growth is real and pressing, but energy efficiency is also important because it can help mitigate the need for new generation to be built.
• The Southeast has nationally-competitive electric rates, but also some of the highest residential electrical bills in the country due to factors like inefficient housing stock, climate, and age of infrastructure. Investing in energy efficiency will bring about lower energy bills while benefiting the grid.

McClinton

• The Louisiana energy office wants to see more of a focus at the national level on permitting reform and increasing processing speeds without compromising the integrity of those processes.

Williams

• Technological innovation and investment in domestic manufacturing are both important and need federal support.
• DOE funding and tax policies that encourage the demonstration and growth of newer technologies will allow the country to control its energy future.

Benner

• Wildfire risk, especially in the West, is an important issue because it is expensive for utilities to upgrade their systems and because of the infrastructure liability (i.e., new lines can potentially start fires), which make them an unattractive investment for private capital.

Cripps

• Winter Storm Fern highlighted that small power companies do not have the resources that larger ones do. In Tennessee, many municipal utilities and rural cooperatives do not have data outage management systems. More federal funding could go to reducing basic inequities at the state level, especially in grid resilience.
• Transportation is often the top sector in terms of energy consumption, so alternative fuels and electric vehicles are incredibly important topics.

 

Q: When we say “energy efficiency,” what specifically are we talking about?

Benner

• Energy efficiency is the fastest and cheapest way to lower energy bills. Oregon has a Home Energy Score program, which can be put on listings when selling a house. A home energy's score is an indication of its energy costs. The program also shares specific steps that can be taken to lower energy bills. Lowering the amount of residential energy used benefits everyone.

Toor

• It is important to reduce the energy use of new buildings. Integrating energy efficient technology during construction is much easier and more cost effective.
• Federal support for the local and state adoption of advanced building codes is an obvious tool to encourage cost-effective improvements.

Williams

• Making buildings a part of the larger energy grid can make the whole grid more energy efficient.

 

Q: What are some ways utilities can be encouraged to consider grid-enhancing technologies, especially when other infrastructure investments may allow them to make more money?

McClinton

• The Louisiana government has been working with Louisiana State University to create a transmission and distribution plan, which includes a focus on grid-enhancing technology.
• Thirty-four “neurons” are being installed across Louisiana, Arkansas, and Texas to send data on transmission back to utilities.

Cripps

• Oak Ridge National Laboratories, as well as other National Labs, work with utilities to do research and become testing sites so that specific relationships between equipment, performance, and demand can be discerned and models created. It is important that state energy offices act as a bridge between academia, research, and local actors.

Anderson

• Energy is mainly regulated at a state and local level, so many decisions are up to regulatory commissions, which can encourage the adoption of beneficial energy policies and technologies.
• Electric cooperatives do not have commission-set policies. Some of these utilities may be more incentivized to look at new technology, because they have fewer regulatory hurdles and different incentives.

Toor

• To have more transparent transmission planning and connection processes, grid enhancing technologies must be explicitly considered.

 

Q: What innovations are we missing related to renewable energy that Congress should be paying more attention to?

Williams

• New York’s recent report, Zero by 40 Technoeconomic Assessment, looks at a spectrum of technologies that would get the state to a zero-emission outcome.
• Nuclear small modular reactors are a potential option. They are almost market ready, and are seen as a key opportunity in New York.
• Long-duration storage technology could revolutionize the way grids operate as well as be a potential substitute for on-site uses for manufacturing and industrial facilities.

 

Q: What role is energy storage playing in meeting peak power demands? What do long winter peaks tell us about what the power grid needs?

Toor

• Energy storage is incredibly important. Right now, Colorado is trying to procure four gigawatts of energy and a gigawatt of accredited capacity, which is validated power that is available during periods of high demand or in emergencies, with close to 80% of that accredited capacity being renewable energy paired with batteries.

Williams

• New York is very supportive of energy storage, with a number of larger scale storage facilities being implemented in the state. Right now, storage is helping the grid ride through stress by providing voltage and frequency support.

Benner

• Both long- and short-duration storage are important in Oregon. The Oregon Solar + Storage Rebate Program supports residential solar paired with storage, which contributes to resilience. There is a similar program for larger scale energy facilities that receive site certificates from the Energy Facility Siting Council.

 

Q: How do your agencies support research and development programs in partnership with research institutions without federal assistance?

Williams

• NYSERDA has five years of funding from ratepayers and approved by the Public Service Commission to study in-state technology and development opportunities. It is doing this work in collaboration with Brookhaven National Lab, universities doing energy technology research, and private sector partners like General Electric and IBM.

 

McClinton

• The National Lab of the Rockies, formerly the National Renewable Energy Lab, researches grid-enhancing technology. Louisiana’s Department of Conservation and Energy is set up to be the energy data repository for the state, and puts out related research in collaboration with state agencies and Louisiana State University’s Center for Energy Studies.

Cripps

• Federal and state funding is crucial to support research and development programs.
• There is $50 million in Tennessee’s state budget to enhance adoption of artificial intelligence technology to make government work more efficiently. There is also $20 million to accelerate Tennessee's quantum computing industry by attracting federal and private sector investment.
• States need flexible and accessible funding to attract private and federal investments.

Benner

• Oregon needs federal collaboration to support research and development. Programs like Solar for All helped the state pursue innovative financing to help solar become more affordable, and federal investment in the Northwest helped accelerate clean hydrogen. Unfortunately, funding for both initiatives has been pulled back.
• Oregon has tried to align with federal priorities by focusing on geothermal and wave energy.

Anderson

• State energy offices are incredibly flexible and great at partnering with technological, political, and funding actors. They know how to chase opportunities and leverage connections.

Toor

• A collaborative relationship between states and the federal government is crucial. States understand their energy landscape more deeply. There has been some strain in the relationship because federal orders have kept uneconomic power plants operating and changes in federal permitting regimes have made deploying resources difficult.

 

Compiled by Aastha Singh and Andie May Hardin and edited for clarity and length. This is not a transcript.

 

Briefing Photos