Blue state residents, whose governments have adopted aggressive climate policies, are paying much more for electricity and fuel than their counterparts who live in red states that lack such policies, according to a new report from America’s largest membership organization of state legislators.
“While some states rely on free market principles and innovation to limit manmade emissions into the atmosphere, others use a more heavy-handed approach by implementing of standards, enacting mandates and pricing schemes that benefit specific types of technologies,” the report reads.
“Whether it is mandates, subsidies, or some combination of both, when the government inserts itself into the energy markets, taxpayers wind up footing the bill.”
The trend of government mandates being linked to higher electricity prices is evident throughout the report.
Big Government Means Higher Electricity Costs
Overall, the report finds that red states that lack their own green energy mandates or that don’t take part in cap-and-trade schemes (systems that limit aggregate emissions from a group of emitters by setting a cap on maximum emissions) have the lowest electricity costs.
Red states Idaho, Wyoming, and Utah had the lowest electricity prices. None of them have a government-mandated RPS or participate in cap-and-trade schemes, such as the Regional Greenhouse Gas Initiative (RGGI), which is a CO2 cap-and-trade program among 10 states in the mid-Atlantic and Northeast regions of the country.
Utah has a voluntary renewable energy goal of 20 percent by 2025, but it’s not a mandate. Idaho and Wyoming don’t have state-mandated net metering, which is the utility billing practice of recording the excess energy generated by a solar installation and applying it to a customer’s bill as credit toward grid-drawn energy.
While the report notes that the impact of state-mandated net metering is “still not clear cut,” some utility companies have said that it represents a cost shift from people who can afford to install solar panels, leaving people without solar to pay a greater share of the fixed costs of maintaining the electrical grid.
Outside of red Alaska and blue Hawaii (which are geographic outliers and so understandably have the highest electricity costs), the five states with the highest electricity prices are all blue: California, Massachusetts, Rhode Island, Connecticut, and New Hampshire.
All five states have cap-and-trade schemes and government-mandated RPSs in place. Each of these states has also imposed a state-mandated net metering policy on its utilities.
Overall, the difference in electricity costs between the cheapest red states and the most expensive blue states is substantial. The costs of a kilowatt hour in California, Massachusetts, Rhode Island, and Connecticut are more than double what they are in red states Idaho, Wyoming, and Utah.
“There is a strong correlation between big government policies and higher electricity costs,” the report states.
“When crafting energy and environmental policies, lawmakers should avoid imposing more government controls and instead allow markets to adapt, innovate, and improve.”
Besides electricity, the ALEC study also looked at gasoline costs across states and similarly found that, in general, there was a correlation between government mandates and prices.
Electricity Versus Natural Gas
Meanwhile, a recent report from the U.S. Energy Information Administration (EIA) found that the cost of heating a home this coming winter using natural gas is going to be roughly 40 percent lower than using electricity.The stark findings come as the Biden administration ramps up its war on gas appliances, including furnaces, while touting electrically-powered alternatives (such as heat pumps), all in the name of fighting climate change.
At the time, Republicans on the House Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs argued that the DOE’s proposed appliance efficiency standards would be burdensome and costly for Americans, hitting lower-income families the hardest.
