A nationwide review of electricity prices and state energy policies found that states with extensive climate and net-zero mandates tend to have higher power rates, with Democratic-voting states disproportionately represented among those above the national average.
By yourNEWS Media Newsroom
Electricity costs have become an increasingly prominent affordability issue for American households, and a new 50-state analysis argues that state climate and net-zero policies are closely associated with some of the nation’s highest power rates.
The expanded “Blue States, High Rates” analysis from Always On Energy Research and the Institute for Energy Research examines electricity prices alongside energy policies in all 50 states and Washington, D.C., including renewable energy mandates, carbon pricing, natural gas infrastructure restrictions, net metering policies, data center consumer protections and utility commitments to reach net-zero emissions.
The researchers found a strong political divide among states with the highest and lowest electricity prices.
Based on U.S. Energy Information Administration pricing data, 86% of states with electricity rates above the national average voted for the Democratic presidential nominee in both 2020 and 2024, while 90% of the 10 states with the lowest rates voted Republican in both elections, according to Just the News.
The groups behind the analysis argue that the political divide reflects significant differences in the energy policies adopted by state governments rather than simply differences in how much renewable electricity states produce.
“While there are many factors that influence electricity rates, the one constant we see is that states that have pursued climate or net-zero policies above all else have some of the highest rates in the country,” Tom Pyle, president of the Institute for Energy Research, said in a statement.
The issue is increasingly relevant to voters concerned about household expenses.
An Ipsos poll released in May found that 79% of respondents would support a political candidate who promised to reduce their utility bills. At the same time, 58% of Americans responsible for paying those bills said they did not understand what determines their utility costs.
Always On Energy Research and the Institute for Energy Research began examining the relationship between state policy and electricity prices with an earlier study released in December. That analysis focused closely on five states and concluded that blue states with high electricity costs tended to have stricter renewable energy mandates and broader climate policies.
The organizations have now expanded the research nationwide, allowing users to examine individual states and compare electricity rates with specific policies adopted by state governments and utilities.
Among the policies examined are renewable portfolio standards requiring utilities to obtain a minimum percentage of their electricity from renewable sources. Researchers also considered carbon pricing programs that charge utilities based on emissions, state approaches toward natural gas infrastructure, net metering rules, protections involving data center electricity consumption and commitments by utilities to reach net-zero emissions.
California and New York illustrate the relationship highlighted by the researchers.
California requires its electricity system to become 100% carbon-free by 2045 and operates a cap-and-trade program. Since 2018, its average electricity price has increased from 16.6 cents per kilowatt-hour to 27.6 cents.
New York requires a zero-emissions electric grid by 2040. Its average electricity price increased over the same period from 14.8 cents per kilowatt-hour to 21.6 cents.
Amy Cooke, president and CEO of Always On Energy Research, said the two states demonstrate how policy choices can affect electricity costs.
“California mandates 100% carbon-free electricity by 2045 and operates a cap-and-trade program, while its average electricity price has climbed from 16.6 to 27.6 cents per kilowatt-hour since 2018. New York requires a zero-emissions grid by 2040, and its average price has risen from 14.8 to 21.6 cents per kilowatt-hour. ‘Blue States, High Rates’ captures what we’ve been saying for years: bad energy policy leads to higher electricity rates,” Cooke said.
North Dakota provides a contrasting example in the analysis.
The state has the lowest average electricity price in the rankings at approximately 8.2 cents per kilowatt-hour.
For perspective, the average U.S. household consumes approximately 899 kilowatt-hours of electricity each month, although household usage varies considerably by geography, climate, home size and other factors.
North Dakota also demonstrates the distinction the researchers make between producing renewable electricity and imposing renewable energy mandates.
About 40% of the electricity generated within North Dakota comes from renewable sources. Renewable energy supporters can point to that figure as evidence that states can produce substantial amounts of renewable power while maintaining comparatively inexpensive electricity.
The analysis, however, emphasizes that electricity generation within state borders is not necessarily the same as the electricity consumed by residents because electricity is routinely transmitted across state lines.
According to federal energy data, North Dakota consumers receive 83.4% of their electricity from coal and natural gas.
The state also lacks many of the policies examined in the “Blue States, High Rates” analysis. North Dakota has no binding renewable portfolio standard, no carbon-pricing or cap-and-trade program, no data consumer protection policy included in the analysis and no utility net-zero pledges. It also has extensive natural gas infrastructure.
The states with the highest power prices present a different policy profile.
Hawaii ranks first for average electricity costs, although its geographic isolation creates circumstances unlike those of mainland states. Hawaii depends heavily on petroleum for electricity generation, and the fuel must be imported, contributing substantially to its electricity prices.
The researchers argue that state climate policies add further costs. Hawaii has a renewable portfolio standard, limited natural gas infrastructure and utility net-zero pledges.
California has the second-highest electricity prices in the analysis.
Rhode Island follows California and has several of the policy features examined by researchers, including a renewable portfolio standard, net metering, carbon pricing, policies that restrict or discourage natural gas pipeline development and utility net-zero commitments.
The report’s authors contend that examining these policy combinations provides a clearer picture of electricity costs than simply looking at the percentage of renewable power produced in a state.
Alex Stevens, manager of policy and communications for the Institute for Energy Research, discussed an earlier limited release of the expanded findings with Just the News in July.
Stevens said the project was designed partly as a resource for voters who want to understand the relationship between state government decisions and their monthly electricity bills, particularly with the midterm elections approaching.
The interactive analysis allows users to select individual states and examine the policies researchers believe have the greatest influence on electricity prices.
The researchers acknowledge that numerous variables can affect what consumers pay for electricity. Geography, fuel availability, generation mix, transmission infrastructure and local market conditions can all play a role.
Their central argument is that climate and net-zero requirements repeatedly appear among the states with the highest rates, even after recognizing that individual states have different geographic and energy circumstances.
That distinction is particularly important in cases such as North Dakota, where renewable electricity makes up a substantial portion of in-state generation but the state does not impose many of the mandates found in higher-cost states.
The analysis therefore focuses not on renewable energy itself but on government requirements governing how electricity must be generated, emissions policies, restrictions involving conventional energy infrastructure and long-term net-zero commitments.
Pyle said consumers should pay greater attention to those decisions because state and local energy policies ultimately affect household costs.
“Every decision made at the local and state level carries real financial consequences for that state’s residents. Understanding the connection between state policy and electricity prices helps provide greater transparency and accountability and empowers ratepayers to push back against bad energy policies,” Pyle said.
With utility affordability becoming an increasingly important concern for voters, the 50-state analysis places greater scrutiny on how electricity policy differs from one state to another and how those choices correspond with what residents ultimately pay.
The findings do not contend that any single policy determines an electricity bill. Instead, the researchers identify a recurring pattern: states adopting multiple climate and net-zero mandates are disproportionately found among the nation’s more expensive electricity markets, while states with fewer such policies dominate the lowest-cost rankings.
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