This Model Executive Order identifies overarching environmental goals and some of the benefits that would result from (i) state agencies purchasing a minimum amount of CCS energy for use in buildings, subject to availability, and (ii) raising the minimum total amount of clean electricity to be purchased by the state government by 2050, where the grid includes plants that are or can be equipped with CCS. These two objectives will encourage “fuel switching” in state government buildings – transitioning from fossil fuels to clean electric energy – as well as the use of CCS energy. The model Executive Order then sets forth the specific goals and targets state agencies should meet with respect to the two Objectives, though each state government and municipality may set different standards based to fit its particular needs, goals, and political circumstances.
Establishing markets specifically for CCS energy would encourage CCS deployment by increasing certainty that a market will exist for their electricity once operational, thereby reducing project risk. One way to create a market for the higher-cost electricity produced by plants that utilize CCS is for the state and municipal entities themselves to buy that electricity, which can be done via power purchase agreements. These contracts are not only important for providing a reliable revenue stream for electricity generators, but they also provide an asset that supports the ability of the generator to obtain debt and equity financing, and would help generators “afford” to invest in CCS—even if it is not yet mandatory under law.
This model was drafted by a team of attorneys from Goodwin Procter LLP, led by Florence Lau, and including Chi pan, Tingyao Pan, Gabriel Lee, Longfei Fang, and overseen by Robert Fitzgerald. Peer review was provided by Esmeralda Colombo, LL,M, Ph.D, and Michael Craig, Ph.D. Critical commentary was incorporated from the LPDD’s Climate Justice Advisory Committee.