Introduction

The 2022 election season kicked off at the beginning of March, when Texas held its primary election, and will conclude in December with a potential general runoff election in Louisiana. The 2022 general election will take place Nov. 8, where 36 governors, the mayor of the District of Columbia, 88 legislative chambers, 17 utility commissioners and a handful of ballot measures will be on the tickets.

The Take

With the primaries just beginning, it is unclear who will be facing off in the November elections. Once these individuals are known, it is expected that the candidates' platforms will begin to take shape.

Midterm elections have been notorious for low voter turnout, with the exception of 2018, which experienced the highest voter turnout in over 100 years. Recent events such as the COVID-19 pandemic and extreme weather have bolstered public perception of the importance of gubernatorial and state legislative elections and could signal a shift in the 2022 election turnout.

In 26 of the 36 states that will be electing their governors, the incumbent governor is seeking reelection. In two states — Vermont and Wyoming — the incumbent has not announced whether they will be running for reelection.

In seven states — Arizona, Arkansas, Hawaii, Maryland, Nebraska, Oregon and Pennsylvania — the current governor is ineligible to seek reelection due to term limits, assuring that a new governor will be elected. Massachusetts Gov. Charlie Baker, a Republican, declined to seek another term in office.

Republicans control the governor's office in 28 states, while Democrats oversee the office in 22 states.

Additionally, the District of Columbia will hold a mayoral election in which incumbent Mayor Muriel Bowser, a Democrat, is seeking a third term. If Bowser is successful in her reelection bid, she will be the district's second mayor in its history to serve three consecutive terms.

New governors can bring about changes in the energy landscape in their state, as different governors have different priorities. These gubernatorial priorities and objectives play an instrumental role in driving legislative policy agendas.

In recent years, the energy segment of gubernatorial candidate platforms has centered on ensuring a clean energy future, including decarbonization of the power sector and increased utilization of renewable resources.

Another frontline issue has been grid modernization, including the deployment of distributed energy resources and protecting the nation's energy system and infrastructure from cyberthreats.

Gubernatorial elections generally bring changes in the makeup of state public utility commissions. While the commissions are independent regulatory bodies, gubernatorial actions can influence the commission's investigations, priorities and direction.

In 26 of the 36 states in which a gubernatorial election will be held in 2022, the governor appoints the commissioners who serve on the state's regulatory bodies. In 20 of the 26 jurisdictions, the governor appoints the chairs of their respective regulatory bodies. In the states where the governor appoints the utility commissioners, 27 commissioner terms are set to expire within the first year of the governor's new term.

The district mayor also appoints the chair and members of the District of Columbia Public Service Commission.

The secretary of the Office of Energy and Environmental Affairs, with the governor's approval, appoints the Massachusetts Department of Public Utilities regulators and chair. The governor appoints the secretary, who is a member of the governor's cabinet. In Tennessee, the governor, speaker of the House and speaker of the Senate each appoint two Tennessee Public Utility Commission commissioners. In addition, all three offices jointly appoint the remaining commissioner.

Starting January 2023, the New Mexico governor will be responsible for appointing the three members of the New Mexico Public Regulation Commission.

In Texas, while the Railroad Commission of Texas members are elected by statewide ballots, the governor appoints the Public Utility Commission of Texas members and designates the chair.

During the 2022 midterm election, 10 states will hold utility commission elections for a total of 17 seats. All 10 of the utility commissions are controlled by a Republican majority, with seven of the commissions entirely comprised of Republican members.

One commissioner, Montana Public Service Commission Vice Chairman Brad Johnson, cannot seek reelection for a new term due to term limits. Montana is one of seven all-Republican commissions and, over the past decade, has leaned more toward the right when electing new commissioners.

There would typically only be one Georgia Public Service Commission seat on the ballot during this election cycle; however, a special election will occur for the PSC District 3 commission seat. The current District 3 commissioner, Fitz Johnson, was appointed to the Georgia PSC in July 2021 by Republican Gov. Brian Kemp. Kemp filled the vacancy created by the appointment of former Chairman Chuck Eaton to the Atlanta Judicial Circuit. According to state law, if a vacancy occurs, the governor must appoint a replacement to serve until the next general election. Johnson must run in the special 2022 election to serve the remainder of the term, which expires in December 2024.

A similar situation is occurring in North Dakota, where Commissioner Sheri Haugen-Hoffart, a Republican, must run for election to serve the remaining four years of a six-year term. Republican Gov. Doug Burgum appointed Haugen-Hoffart to the North Dakota Public Service Commission to fill a vacancy created by the departure of former Commissioner Brian Kroshus, who was appointed to head the North Dakota Office of State Tax Commissioner.

Louisiana uses a nonpartisan blanket primary system, or a "jungle primary," meaning that all candidates run regardless of political affiliation, and the voters cast ballots in one primary election held Nov. 8. The candidate receiving a simple majority is then deemed the victor; however, should no candidate win by a simple majority, the top two vote-receivers, regardless of party affiliation, move forward to a runoff general election, which would then be held Dec. 10.

Texas kicked off the 2022 primary season March 1. Primary election winners are determined by majority vote; therefore, in the case of no candidate receiving more than 50% of the votes cast, the top two candidates proceed to a runoff election.

Texas Gov. Greg Abbott, a Republican, will be seeking reelection in the midterms, having defeated Allen West and Don Huffines in the March primary. During the November election, Abbott will face Democrat Beto O'Rourke, who defeated Joy Diaz and Michael Cooper in the primary.

In addition to the governor's office, Railroad Commission of Texas regulator Wayne Christian, a Republican whose term expires in December, is seeking reelection for a six-year term. However, Christian failed to secure the necessary votes to win the Republican nomination and face Sarah Stogner in a runoff election. The primary runoff election will take place May 24, where the winner will face Democratic challenger Luke Warford.

Legislative races

A total of 46 states will hold regular legislative elections in 2022, with 88 of the 99 legislative chambers being on the ballot. Over 6,100 state legislative seats will be up for grabs. Louisiana, Mississippi, New Jersey and Virginia will not be conducting regular state legislative elections during November. While they are not conducting state Senate elections this year, citizens in Kansas, New Mexico and South Carolina will vote on the members of their House of Representatives.

In addition to state legislative elections, the District of Columbia will be holding elections for the chairman of the D.C. Council and D.C. Council Wards 1, 3, 5, 6 and the at-large seat.

Republicans control the legislative branch in 30 states, while the Democrats have control of 17 state legislative branches. While Nebraska's unicameral legislative branch is technically nonpartisan, a majority of its members identify as Republican and have voted along party lines. The legislatures in two states are divided between the two political parties, with Republicans controlling the Minnesota Senate and the Virginia House of Delegates and Democrats controlling the Minnesota House of Representatives and Virginia Senate. The 2021 general election saw the Virginia House of Delegates flip from Democratic to Republican control.

With no specific correlation between the quality of energy legislation enacted and the political party controlling the legislature, it is typically easier for the governor to implement key policy initiatives, which may or may not be focused on energy issues, in a situation where the governor and legislature are of the same political party.

Legislative activity impacting utility regulatory issues has been robust over the years. After a sluggish 2020 in terms of enacted energy measures, it seemed that 2021 was going to see states focus on economic recovery from the COVID-19 pandemic and address social justice reform, making energy policy, particularly renewable energy policy, less of a legislative priority. However, following February 2021's winter storm and other extreme weather events that caused major disruptions in the energy markets and crippled portions of the country, state policymakers enacted legislation focused on securitization and storm costs as well as overall energy market reform.

Additionally, in 28 states, utility commissioners require Senate confirmation to serve on the regulatory body. All of those states, except Kansas, will hold elections for their state Senate seats. In four states — Alaska, Connecticut, North Carolina and Tennessee — the General Assembly confirms commissioners, and all four states are holding legislative elections.

The New Hampshire Public Utilities Commission members are confirmed by the state's Executive Council, consisting of five elected council members who serve for two-year terms. All five terms will be up for election in November. The council comprises one Democrat and four Republicans.

In South Carolina and Virginia, utility commissioners are elected by the General Assembly.

The South Carolina General Assembly elects the Public Service Commission of South Carolina regulators from among the candidates selected by a legislature's 10-member Public Utilities Review Committee that nominates up to three candidates for each commission seat. The committee comprises three members from the Senate, three from the House of Representatives and four members from the general public. All 124 House of Representatives seats will be on the ballot in 2022. Following the 2022 election, four commissioner terms are set to expire by June 2024.

Ballot measures

While it is still early in the year, a handful of energy- and non-energy-related ballot measures have already advanced through the certification process of appearing on the November ballots.

In New York, a legislatively referred bond question will be placed before voters during the midterm election. The Clean Water, Clean Air and Green Jobs Environmental Bond Act seeks to allocate $3 billion in general obligation bonds to various environmental protection programs and projects related to restoration and flood risk reduction, open space land conservation, climate change mitigation and water quality improvement and resilient infrastructure.

During the State of the State speech, New York Gov. Kathy Hochul highlighted a proposal to increase the act by $1 billion.

The bond proposal was initially introduced during former Gov. Andrew Cuomo's 2020 State of the State address; however, fearing the financial ramifications of the COVID-19 pandemic, the proposal was later shelved. During the 2021 legislative session, the proposal was reintroduced through the state budget legislation and later signed in April 2021.

In New Mexico, voters will decide on a legislatively referred constitutional amendment that amends the "anti-donation clause" of the New Mexico Constitution. The new section would allow the use of state funds or resources to provide essential household services, which is defined as "infrastructure that allows internet, energy, water, wastewater or other services as provided by law."

The New Mexico Public Regulation Commission notes that the state's Public Utility Act provides for investor-owned utilities and member-owned rural cooperatives to have the exclusive right to serve retail customers in their service territory and may conflict with the expenditure of state funds or resources to develop the supporting infrastructure.

Regulatory Research Associates is a group within S&P Global Commodity Insights.S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.

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