US Governors Are Leading Efforts to Tackle the Cost of Electricity

This policy brief by RMI examines how US governors are addressing rising electricity costs, which have increased by an average of 23% over the last decade. The document highlights actions taken by governors in at least 14 states since 2023 to balance immediate customer relief with long-term system cost containment, while warning against superficial measures like one-time bill credits that do not address underlying affordability challenges.

• Residential electricity bills in the United States have risen by an average of 23% over the last ten years, with costs outpacing inflation in nine states. This has led to significant financial strain, with more than one in three households reporting they had to reduce or forgo basic necessities or food last year to pay energy bills, and 20% being unable to pay a bill for at least one month. Extremely low-income households face an average energy burden of 14%, compared to 3% for non-low-income households.
• Average US residential electricity prices have grown by 6.9% annually over the past three years, driven by investments in transmission and distribution infrastructure for grid modernization, resilience, and the replacement of aging assets. Future cost pressures are expected to rise as electricity demand is projected to increase by nearly 16% over the next five years, fueled by electrification, manufacturing, and data centers.
• Heavy reliance on natural gas has increased vulnerability to price volatility, with monthly price variance since 2021 being more than double that of the 2008-2020 period. In most states, these fuel costs are passed directly to customers, meaning customers bear 100% of the risk and utilities lack incentives to avoid price spikes.
• Since 2023, governors in at least 14 states have implemented actions to improve electricity affordability. Examples include Governor Healey of Massachusetts strengthening demand response and energy efficiency programs (such as ConnectedSolutions and Home Energy Audit and Weatherization), Governor DeWine of Ohio signing legislation to end ratepayer subsidies for two unprofitable coal plants operated by the Ohio Valley Electric Coalition—saving ratepayers nearly $500 million since 2019—and Governor Polis of Colorado directing the PUC to establish a natural gas fuel risk-sharing mechanism.
• The document cautions that certain governor-led actions may be ineffective or counterproductive. One-time bill credits may not address root causes and could divert funds from more valuable long-term programs. Similarly, re-allocating funds between weatherization and energy efficiency rebates may not change affordability status, and delaying coal plant retirements to avoid stranded asset costs may result in ratepayers paying for uneconomic plants to continue operating.

APA

RMI (2025). US Governors Are Leading Efforts to Tackle the Cost of Electricity. https://rmi.org/resources/us-governors-are-leading-efforts-to-tackle-the-cost-of-electricity/

Chicago

RMI. US Governors Are Leading Efforts to Tackle the Cost of Electricity. 2025. https://rmi.org/resources/us-governors-are-leading-efforts-to-tackle-the-cost-of-electricity/.

Wikipedia

{{cite report |author=RMI |title=US Governors Are Leading Efforts to Tackle the Cost of Electricity |date=20 June 2025 |url=https://rmi.org/resources/us-governors-are-leading-efforts-to-tackle-the-cost-of-electricity/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025governors, author = {{RMI}}, title = {{US Governors Are Leading Efforts to Tackle the Cost of Electricity}}, institution = {RMI}, year = {2025}, month = jun, url = {https://rmi.org/resources/us-governors-are-leading-efforts-to-tackle-the-cost-of-electricity/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }