A Q&A on federal challenges to Colorado’s clean energy track

Mid-May in Washington, D.C., brought some loud Trump administration warning shots for states like Colorado, where majorities of voters have pushed for clean energy alternatives and action on climate change. 

First, the U.S. House and Senate voted to strip California — and states that have largely copied their rules — of the right to go further than EPA minimums in selling clean electric cars and trucks. Colorado’s Air Quality Control Commission renewed and expanded the state’s clean cars and trucks mandate in 2023. Those “waivers” to promote green energy are now dead unless revived by challenges in court. 

Second, the House forwarded to the Senate a budget that slashes most of the clean energy and climate change subsidies championed by the Biden and Obama administrations. If the Senate doesn’t restore the subsidies, building solar farms, buying EVs and other clean energy staples will be much more expensive. 

So we asked Colorado’s electrification and clean energy czar, Colorado Energy Office CEO Will Toor, for his take on last week’s warning signs. 

Sun: People in the environmental community seem pretty shaken, not just by the budget, but the waiver votes, which went further on EVs than they had really expected. So, tell me if you think you can protect Colorado’s EV targets, and what you thought of the vote.

Toor: Certainly we were very, very disappointed to see the actions by Congress on the budget, and both the House and the Senate on the waivers that allowed states to enforce both clean car and clean truck standards. Just from a procedural perspective, it was a pretty clearly inappropriate use of the Congressional Review Act. Given that both the General Accounting Office and the Senate parliamentarian had ruled that, in line with all previous interpretations, that you couldn’t use the CRA for this purpose. And clearly, states should have the ability to take action to protect clean air and reduce greenhouse gas emissions in their state. So we’ll see where that heads, going forward. But it was a very disappointing action.

Sun: Have you consulted with the Colorado attorney general, and do you feel you can enforce Colorado’s rules in the meantime? 

Toor: I think it is probably premature for me to speak to that. It’s worth noting that there’s not an immediate impact on Colorado. Our standards will start to come into effect in the 2027 model year. There’s a one-year gap in 2026 on the standards, during which manufacturers would be able to accumulate early action credits, but there’s no direct regulatory requirement. 

The other thing that’s kind of interesting is, if you look at our existing clean car standards in the state, and then you look at actual EV adoption in the state, the actual market share has been far higher than the minimum regulatory requirements. Under the original clean car standards, the 2025 requirement translates into a real world market share requirement of 6-to-7% range for the share of new vehicles that need to be zero-emission vehicles. Whereas the actuals in Colorado over the last number of quarters has varied between about 25% and 30%, so about four times higher than the minimum. So we do think that consumer demand in Colorado and the strengths of state programs that are investing in infrastructure to make sure that people know they can get where they need to go and not have to worry about charging availability, and the state incentives that have supported EV adoption by consumers, and then the state incentives through things like the clean fleet enterprise that support adoption by business and local government — those vigorous programs have led to far higher sales than would be required by the regulations. I think what the regulations have done is to ensure that manufacturers bring all of their vehicles to Colorado. They’re important, but I think we are hopeful that our vigorous programs around education, incentives and infrastructure will continue to move the market.

Sun: Not to be Debbie Downer, but that brings us to the loss of $7,500 federal tax credit that helped boost a lot of those sales, that elimination is in the House-passed version of the budget. Unless the Senate makes some major revisions, there would also be losses of quite a lot of the other electrification and clean energy subsidies that are out there.

Toor: It is certainly the case that almost all of the headwinds that we see now are coming from the federal government, and we see that in multiple arenas. There’s the House version of budget reconciliation that removes the federal EV tax credit. We’ve seen it in the illegal act by the U.S. Department of Transportation to try to yank back national electric vehicle infrastructure funds that by act of Congress had a formula that said Colorado should get $57 million for that. And the vast majority of that has been frozen. That is an arena where we think that there is a clear case that is illegal. Colorado a couple of weeks ago, along with other states, took the lead on filing litigation to restore those funds. There’s also the tariffs. Obviously there’s so much uncertainty in the implementation of tariffs by the Trump administration. It’s hard to know where that’s going to go, but we certainly worry that the imposition of tariffs will essentially create a large tax on all new vehicles, but in particular electric vehicles, and right at a time when we’ve been moving closer and closer to cost parity, that may artificially drive up the cost of vehicles. So I don’t want to sugarcoat it. I think we are very concerned about all of the actions that both the administration and now potentially Congress are taking to hurt American competitiveness. Giving the electric vehicle leadership to Chinese manufacturers, rather than American manufacturers and consumers in this country. Some real worries there.

Sun: Do you have any confidence or comfort that the Senate will push to put back some of the important subsidies?

Toor: We are certainly hopeful that cooler and wiser heads will prevail in the Senate than in the House. It was incredibly disappointing to see the extent to which many members of Congress took actions that will hurt their own constituents in their own districts, and drive up the cost of energy, drive up the cost of vehicles, drive up pollution and reduce manufacturing investment in their own districts. But I’m hopeful that the Senate will take wiser action.

Sun: What else can Colorado do to protect these policies that a significant progressive majority of voters for some time now have put into place, step by step?

Toor: We will continue to see progress moving forward in Colorado, if you look at our greenhouse gas road map and think about the major sources of pollution in the state: the electricity industry, oil and gas vehicles, manufacturing, and burning fossil fuel in buildings. The majority of actions in most of those sectors can be taken at the state level. The federal government can put wind in our sails, or can create headwinds on those actions. But in most cases, it is ultimately state decision-making. As a state, we are the ones who adopt the rules for electric resource planning, and for the emission targets of our electric utilities. As the state, we are able to adopt the rules that regulate methane emissions from the oil and gas industry. We have the authority to move forward on programs like the clean heat plan requirements for gas utilities, and setting energy codes and building performance standards. So while there certainly are things that the federal government can do to raise costs for consumers, and create obstacles to economic development, in most areas I don’t think that they’re able to block state action.

Sun: There have been rumblings, or sometimes overt declarations, that the Trump administration will deputize the federal Department of Justice to go after states that have gone further than federal law. Are you concerned about that, that these things you are saying should be under state control won’t actually be under our control? 

Toor: If you look at the history of developing these programs in Colorado, whether it be legislation, regulatory requirement, state investment, or state incentives for clean energy, they’ve all been very carefully crafted with a clear-eyed understanding of what the legal constraints are from federal law. And so I really don’t believe that the work we have done would be vulnerable to a legal attack by the administration or the Department of Justice. It’s interesting to me, if you go back in history and think about some of the really important steps that Colorado took on this journey, probably the first really big step was the adoption of the state renewable electricity portfolio standard that was challenged in federal court. There was a Commerce Clause argument made that this was unfair against state power suppliers.  And the 10th Circuit Court of Appeals, which ruled in favor of the state in that case, the decision was written by a justice who happened to have the name Gorsuch. Who’s now on the Supreme Court. That illustrates the kind of care that’s been taken, that even very conservative courts have upheld state policy, because it is crafted with a clear understanding of what the Constitution and the law allow.

Sun: So Colorado should not be concerned that Xcel, or Tri-State, or other folks are going to start pitching new coal-fired power plants, or major new gas plants?

Toor: I certainly think there’s no new coal-fired power plants coming to the state. And I think we are continuing on the pathway of retiring expensive legacy coal generation and replacing it with lower-cost, cleaner energy. When it comes to natural gas generation, I would say that from a state perspective, our emissions targets are not technology-specific. We’re telling utilities, you need to meet an 80% reduction by 2030, but we’re not telling them which technologies they need to use to meet that. To date, what we’ve seen is that coal generation is largely being replaced by wind, solar and batteries, but that gas generation has had an important role to play in providing reliability and ensuring access. And in the modeling that we did looking out to 2040, while gas would likely continue to play an important role for reliability, as we put more and more wind and solar and batteries on the grid, then gas plays a less and less important role in actually producing energy. You need it there, because there are some hours of the year where you absolutely need it to keep the lights on, but it’s not used very much. Modeling predicted that even with some increase in gas capacity in the state, that by 2040 only 2 or 3% of that power would actually come from gas. Most hours of the year, it’s cheaper just to run your wind, and solar, and batteries.

Sun: Can you reassure people that we are comfortably still on that track for 80% reductions of emissions in that very big area of electrical generation, by 2030? 

Toor: Yes. I am very confident that we are still on track for meeting our electric sectors 2030 targets. And I think there will be a vigorous conversation over the next year about what it looks like to move past 2030, and think about potential 2040 clean energy targets.