“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.
Just as well you didn’t include Old England in the price of electricity listings.
Currently Old England pays $0.45/kWh for domestic energy.
That cost is made up of usage cost at £0.2611/kWh plus standing charges, i.e. the cost of being a customer of £0.5719/day multiply that by the current exchange rate of ~$1.35/£ and we arrive at $0.45/kWh average based of consumption of 8kWhs/day.
On top of those already eye watering direct charges for electricity are state grants given to green/renewable energy providers. That grant money is actually paid by the tax payers via the treasury. Some of it comes from green levies that form part of the direct payments made by the consumers on their bills, but a large part is also paid from direct taxation.
Apparently the high cost of UK electricity is all due to the conflict in the Gulf of Hormuz, that took over from the conflict in Ukraine as the reason for high energy costs. Before the conflicts the reason for high energy bills was Covid…..draw your own conclusions. Ed will no doubt find a way to cover the £7billion of unpaid energy bills and rising as people on low income and those simply gaming the system refuse to pay for unaffordable energy.
We are cursed in the UK.
It must be amusing for others look at the UK as a prime example of what not to do.
If only they would! Instead they look to the UK with envy.
The same thing would befall some of our blue states, were it not for the fact that, by being part of a federation of 50 states, they can somewhat smooth things over more than they otherwise could. The curses in places like the UK, California, New York etc. are the leadership, which is ultimately the responsibility of the voters.
Has there been any mention in the UK press that Administrator Lee Zeldin of the US EPA has rescinded the Endangerment Finding of 2009 for CO2 which is now considered no longer to be a threat to human health and welfare?
And your energy minister is doing all he can to raise UK rates still higher.
Some may find this detail of cost for electricity in the UK published today on the Conservative Woman website helpful and enlightening..
https://www.conservativewoman.co.uk/the-climate-scaremongers-red-ed-is-about-to-cause-irreversible-energy-damage/?utm_source=newsletter&utm_medium=email&utm_term=2026-06-05&utm_campaign=TCW+Daily+Email
No words from me needed, other than this is unsustainable.
Really good piece from Homewood. These people are absolutely insane. It doesn’t matter about the climate one way or the other, it has no effect on climate. As an energy policy its insane.
Is it unsustainable? Probably not in the sense that they are capable of doing it and locking it all in. And as Homewood points out, a split right wing vote can indeed allow a second Labour term. The question is whether, confronted with another Labour government, elected with, for instance, 20-25% of the vote, and committed to keeping on, the UK Constitution and civil order will break down.
You can imagine a situation in which Labour is returned with for instance a majority of 30 or 40 because of the split right in an FPTP system, continues to govern in present style, and where almost every local authority swings to Reform or Conservate (or Restore!), and where local authorities just refuse to implement legislation, there are widespread and increasingly violent demonstrations, and at some point the police just give up.
Do they break with 400 years of tradition and try and get the army to restore order? Does the army even agree to do it? The potential is there for a political and constitutional crisis on the scale of the 17th century.
That’s what happens when an economy gets destroyed.
Mad Ed has UK electricity prices three times higher than most U.S. states, and, no doubt, they are going higher. At some point it all falls down.
It truly is insane. Mad Ed is insane. Labour is insane.
The intention always was to raise the cost of energy to discourage use. That plan doesn’t work because energy demand is largely inelastic and so we all become poorer instead.
Maybe the real intention always was to make everyone poorer( therefore the systematic destruction of the middle class ) and expensive energy was the best way
of taxation to achieve a controlled demolition without pissing people of with higher official taxes(just as it is easier to occupy countries via UN /IMF /WHO etc. than to use standing armies),
or the inflation that may spiral out of control or can limit the quality of responses if some real emergency occurs.
Once all countries had “smart” laws following the rules of supply and demand.
The dumb laws are quite a modern thing,
and it seems to be just another variation of the IMF/WorldBanks debt traps and (the economic renewablews)Washington Consensus(even former IMF topdog Stiglitz talks about this in his book Globalization and its discontents), to stiffle development and transfer wealth while pretending to do good.
Are the electricity rates cited in this article just for electricity alone or do they also include the delivery charges, taxes and fees?
In the USA, FERC, DOE, SEC, etc..have mandated onerous regulations on the massive interstate transmission grids. Promulgated by state utility commissions and governors. The Pennsylvania governor even sued PJM, the country’s largest grid operator, to lower costs. How naive is that!
PJM has repeatedly shown that too much mandated, hidden-cost, sporadic, intermittent “green” energy sources cannot be dispatched and reduce reserve capacity essential to intantly adjust to consumer demand.
Blackouts and high costs are the result.
A leading economic economy cannot continue with expensive, undependable energy sources.
Consumers must vote to end energy tyranny.
This article makes very good points about misguided state policies.
But there never was a valid reason for restricting fossil fuel energy to begin with.
“Today, there is scientific clarity that the world is not running out of carbon resources, nor will there be runaway global warming.“
As of early 2009, as a fundamentally science-based institution, and in spite of the GISS aberration under Dr. James Hanson, NASA knew there was no risk of runaway warming. So it’s not just “today” as though it has now become clear from advancing scientific work. The concept of 4th-power dependence of longwave emission on temperature is not new.
More here. I note that the NASA article to which I make reference here was written a week before President Obama took office to begin his first term. He bears responsibility, in my view, for pushing federal policy off the rails, which led the states to follow.
https://wattsupwiththat.com/2022/05/16/wuwt-contest-runner-up-professional-nasa-knew-better-nasa_knew/
Thank you for listening.
Obama-the gift that just keeps giving…like herpes. That man did more damage, directly and indirectly (his stooge Biden) to the US than most people realize.
George:
Yep. The Biden Administration was just Obama’s 3rd term as president. Biden surrounded himself with ex-Obama officials, then napped while his handlers used the Autopen.
Illinois is 31st? How can that be when our north and central areas are plastered with wind turbines and solar arrays, there is large use of natural gas but with opposition to supplying it, and they are dedicated to eradication of all coal plants and no more nuclear if they can’t shut them down?