States with aggressive climate mandates consistently face higher electricity and gasoline costs, according to a recent report from the American Legislative Exchange Council (ALEC). ALEC’s 2026 Energy Affordability Report outlines how states with Renewable Portfolio Standards (RPS) and cap-and-trade programs drive up consumer electricity costs. In contrast, states with deregulated electricity systems, which prioritize affordability and flexibility, continually deliver cost-efficient energy to homes and businesses.
ALEC reviewed both electricity prices and gasoline and diesel prices to create a comprehensive picture of state energy systems. The report tells a clear story: climate mandates manifest as high utility bills that fall unfairly on the shoulders of consumers. By contrast, states that prioritize affordability, flexibility, and an all-of-the-above energy strategy keep costs down for homes and businesses.
In a time when electricity and gasoline prices are spiking, extreme climate policy only makes energy costs more expensive for American consumers. Keeping energy affordable means maintaining access to dependable, scalable resources like natural gas — not restricting them.
When it Comes to Regulating Energy, Less is More
The states with the lowest retail electricity prices in 2024, North Dakota, Louisiana, and Nebraska, all shared a common approach of goals rooted in affordability and common sense. These three states maintained prices well below the national average of $13.69 cents per kilowatt-hour by not requiring a specific percentage of their electricity to come from renewable sources, as well as not participating in carbon cap-and-trade systems.
Source: American Legislative Exchange Council
In fact, the states with the highest retail electricity prices are bogged down by climate regulations, which consistently lead to skyrocketing consumer electricity prices. Excluding those with geographic challenges such as Hawaii and Alaska, the states with the highest retail electricity prices were Democratic-run states with overly-ambitious climate policies, including, California, Connecticut, Rhode Island and Massachusetts.
California’s case is particularly egregious. Despite being the world’s fourth-largest economy, California remains a net energy importer, importing 43 million megawatt hours of energy from other states in 2023. At the same time, it has operated a cap-and-trade program since 2006 and is targeting 100% carbon-free electricity by 2045, both policies which have laid the groundwork for some of the highest energy prices in the country.
On the other hand, Connecticut, despite being a net energy exporter, also faces some of the highest electricity prices in the nation. State initiatives like a requirement that 37 percent of its electricity come from renewable sources by 2030 and the Regional Greenhouse Gas initiative continue to bring up rates for consumers.
The formula is clear: overregulation equals sky-high electricity costs.
Another reason why Democratic-run states, particularly in the Northeast, face consistently high electricity prices is because of constraints on pipelines and other critical energy infrastructure which limit access to affordable energy sources like natural gas. As the Marcellus Shale Coalition explains:
“By expanding pipeline capacity, Americans could save an estimated $76 billion by 2040, providing much-needed relief to households and businesses in the Northeast. In Pennsylvania, the economic benefits would extend beyond energy savings to include job creation and infrastructure investments.”
The U.S. Energy Information Administration (EIA) has shown that natural gas demand will continue to increase as it remains a critical component of the American energy system. As EID has previously examined, in order to meet this demand, massive infrastructure expansion will be needed. Prioritizing climate agenda over critical infrastructure buildout will only keep costs high as power consumption increases.
Consumers Need a Break from High Gasoline Prices
The same patterns of unaffordability are present when you look at gasoline prices. Hawaii, California, and Washington are the three states with the highest fuel prices, and two-thirds of them (California and Washington) participate in a cap-and-trade program. Once again, California stands out as a flagrant offender, with excessive state taxes and fees resulting in incredibly high gas prices.
Source: American Legislative Exchange Council
The states with the lowest average fuel prices— Oklahoma, Texas, and Mississippi— do not have cap-and-trade programs that limit fossil fuel energy production. Instead, they support state policies which encourage energy production, allowing consumers to benefit from affordable and abundant oil and gas resources in the region.
Rising electricity and fuel prices are squeezing household budgets and limiting economic growth. The culprit is obvious: strict climate mandates contribute to higher energy costs and increased burdens for consumers.
Bottom line: The human cost of extreme climate mandates that industry has long warned about are showing up as soaring electricity prices for consumers and businesses. The report from ALEC confirms affordable, reliable energy is a direct result of policies that encourage American energy abundance, rather than work to stifle it.
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