A December 2025 report found blue states with climate mandates have more expensive electricity rates compared to red states without them.
The Institute for Energy Research, in conjunction with Always on Energy Research (AOER), found in their “Blue States, High Rates” that 86% of states with electricity prices exceeding the national average are reliable Democratic (blue) states compared to 80% of states with below average electricity prices that are reliably Republican (red). The report primarily examined California, Florida, Louisiana, Kentucky, and New York.
“Higher costs in blue states are linked to aggressive renewable and carbon-free mandates, clean energy standards, net-metering policies, premature retirements of dispatchable generation, and restrictions on natural gas infrastructure,” explained AOER.
Federal policy, energy producers, and artificial intelligence (AI)-powered data centers are commonly blamed as root causes of higher electricity prices. But the blame largely rests on states. The report notes that under the Federal Power Act (FPA) states have “exclusive power to decide which resources supply their grids.” IER further explained:
Under the Federal Power Act (FPA), Congress preserved expansive state powers to regulate the electricity generated and sold within their borders. These powers allow states to determine their generation portfolios, site and permit power generation facilities outside nuclear and hydroelectric plants, regulate retail prices, and exercise authority over resource adequacy and reliability, meaning states are charged with ensuring that utilities, and electric cooperatives, often referred to as load serving entities (LSEs), maintain adequate power plant capacity to keep the lights on. (emphasis added)
The report also mentioned that state renewable portfolio standards (RPSs), determined and implemented by states, often invite higher utility bills. As I explained in Independent Women’s special report on energy abundance, state RPSs promise to lower electricity costs yet deliver, at minimum, an 11% increase in electricity costs compared to non-RPS states.
A November 2025 report published by Lawrence Berkeley National Lab concluded New England states belonging to the Regional Greenhouse Gas Initiative (RGGI)—a cap-and-trade program aligned with 100% renewable energy targets—had higher electric prices compared to states like Pennsylvania, which just exited the RGGI.
“Those states—especially in the Northeast and Mid-Atlantic regions—with relatively lower-quality wind and solar resources have often tended to experience larger price impacts,” the report explained.
Between 2019 and 2024, electricity prices in six New England states rose 29% during this time period–higher than any other region in the U.S., save for California and Hawaii. As of this writing, Hawaii has the highest residential electricity rates of any U.S. state—followed by California, Massachusetts, Alaska, and Maine.
However, there are remedies available to alleviate high electricity rates in both blue states and red states—namely, consumer-regulated electricity (CRE). CRE would allow off-grid electricity suppliers, such as tech companies behind data centers, to supply their own power without raising energy costs. This reform was successfully adopted in New Hampshire last summer, and a bill was just introduced in the U.S. Senate.
On January 12th, President Donald Trump touted CRE, writing on Truth Social, “Data Centers are key to that boom, and keeping Americans FREE and SECURE but, the big Technology Companies who build them must ‘pay their own way.’”
Blue states with high rates should reassess their climate policies and adopt an energy abundance posture.