“It was the best of energy policies; it was the worst of energy policies” – Charles Dickens, A Tale of Two Cities. (Apocryphal)
Higher electricity prices and a lack of cheap energy are in the news. Even before the start of the Iran war, consumers over the winter of 2025-2026 experienced some of the highest energy prices on record, especially electricity consumers in the Northeast and New England.
A recent report by the American Legislative Exchange Council, known as ALEC, America’s largest voluntary membership organization for state legislators, shows the problem lies in local politics, not supply and demand. When it comes to electricity prices, there are two types of American states: those that manipulate electricity markets to the detriment of their citizens, and those that do not.
In 2024, the most recent year with reliable data, the average retail price of electricity nationwide was 13.69 cents per kilowatt-hour. Thirty-seven states average below that level, while the remaining 13 states are ahead in a race that no one should want to win.
Since 2021, ALEC has ranked the states in affordability from 1st to 50th.
The cheapest states for electricity – North Dakota at 7.93 cents (kWh), Louisiana at 8.80 cents (kWh) and Nebraska at 9.07 cents (kWh) – get the gold, silver and bronze medals for affordability in this year’s rankings. All three are either natural gas-rich or import low-sulfur coal from neighboring states.
But low electricity prices aren’t just a case of geological inheritance or lucky geography. Blue states like Washington, which placed 13th in the rankings, and Oregon, which placed 22nd, benefit from far-sighted 20th-century leadership that built out massive hydroelectric capacity along the Columbia and Snake River systems. Illinois ranks 31st, having benefited from the construction of 11 commercial nuclear reactors in the 1960s and 1970s. All three have average prices in the 10-, 11-, or 12-cent-per-kilowatt-hour range.
Meanwhile, all states to the north and east of New Jersey are disappointments. New York, Vermont, Connecticut, Rhode Island, Massachusetts, New Hampshire, and Maine have electricity prices well above the national average. Connecticut, Massachusetts, and Rhode Island each have prices over 23 cents a kilowatt-hour. They’re at the back of the pack.
The ALEC study found that the presence of three pernicious types of legislation in all these places: a Renewable Portfolio Standard (RPS), participation in a carbon cap-and-trade scheme, and statutorily mandated net metering requirements. When implemented together, these laws consistently lead to higher electricity costs.
All three programs became popular in the past three decades under the false assumption that both peak oil and a climate emergency would threaten the planet. Today, there is scientific clarity that the world is not running out of carbon resources, nor will there be runaway global warming. Yet state legislatures are held hostage to past policy mistakes, much like the Jacobins of the French Revolution, who felt that the best way to solve problems caused by idealism was “more idealism.”
“These policies can require utilities to purchase specified generation sources regardless of cost, acquire emissions allowances for carbon usage, or compensate distributed generation at above-market rates,” the ALEC report said. “By contrast, states that emphasize market competition and regulatory predictability are more likely to maintain affordable energy for households and businesses.”
It’s no accident that every state in New England is above the national average for electricity prices. Every state in the region uses all three examples of market-distorting legislation pointed out in the ALEC report.
Massachusetts stands out as a major culprit. Not only do ratepayers pay for the privilege of membership in a regional cap-and-trade program, but the Baked Bean State obligates utilities to participate in, not one, not two, but four separate renewable portfolio standard programs mandating investment in non-carbon energy, regardless of cost.
The four Massachusetts portfolio-standard systems helped create a grid architecture that is heavily dependent on intermittent renewables, hostile to new carbon-based infrastructure, and must navigate multi-layered climate mandates while simultaneously retiring coal and nuclear capacity.
The irony of Massachusetts energy policy is that a system designed to move beyond fossil fuels ended up making the region more vulnerable to natural gas scarcity and price spikes.
The same can’t be said for Florida, which has an electricity-use profile more similar to Massachusetts’ than to most other states.
Both states are carbon-poor and import energy from neighboring regions. Both states use natural gas for 77% of their electricity usage, and both states have grids vulnerable to weather-related outages.
Yet, Florida’s electricity price of 12.53 cents per kWh is roughly half of Massachusetts’ rate. What’s the difference?
As the ALEC report pointed out, Florida is not part of a cap-and-trade carbon system, nor does it have an RPS on the books. This absence allows for better investment signals needed for new base-load investment.
These are smart choices by Florida politicians. In the end, state legislatures have sovereignty, and it’s natural for legislators to want to solve problems. The trick is to do no harm, and some states have shown a willingness to engage in the future through better legislation.
Last year, Louisiana became the first state to adopt legislation that provides clear statutory guidance on affordable, reliable, and clean energy. The legislation classified energy generated by nuclear reactors and natural gas as “green energy” to help residents avoid massive spikes in utility costs when states try to force a swift transition to renewable energy.
Not surprisingly, Louisiana shot up the ALEC Energy Affordability ranking after it passed the ARC legislation, moving up 16 spots to 3rd place.
This legislative clarity is also taking place at the federal level. Ohio Congressman Troy Balderson’s “Affordable, Reliable, Clean Energy Security Act” is one such example. The bill seeks to establish clearer definitions of key terms such as “affordable,” “reliable,” and “clean,” ensuring that investment risks are limited to cost-effective infrastructure projects.
Electricity is not a luxury; it is a necessity. Smart legislation should replace dumb legislation based on a horribly flawed vision of the 21st century. It’s time for state legislators to step up and do what Congress has failed to do: pass affordable, reliable, and clean energy legislation.
William Murray is a former speechwriter for the Environmental Protection Agency (EPA), the past editor of RealClearEnergy from 2015 to 2017, and currently the chief speechwriter for the Commodity Futures Trading Commission (CFTC).
This article was originally published by RealClearEnergy and made available via RealClearWire.