Conservation groups complain that the state's approach is likely to be rejected by federal officials who are requiring states to reduce emissions.
The state's Environmental Management Commission voted Thursday to move forward with the plan by holding public meetings in December and January. Final decisions on the plan would be made in 2016.
State officials argue that improving the efficiency of power plants is the only approach that would be legal out of three encouraged by the Environmental Protection Agency.
The Sierra Club argues that state officials are essentially picking a fight with the federal agency by rejecting the other options for managing carbon emissions.