US Governors Are Leading Efforts to Tackle the Cost of Electricity

The document examines how governors in at least 14 US states have addressed rising electricity costs, which have increased by an average of 23% over the last decade. It identifies key cost drivers, such as grid modernization and natural gas volatility, and evaluates specific state-level interventions including regulatory reforms, energy efficiency programs, and the removal of coal plant subsidies.

• Residential electricity bills in the US have risen by an average of 23% over the last ten years, with inflation being outpaced in nine states. This has led to significant financial strain, with over one-third of households reporting they had to reduce or forgo basic necessities or food to pay energy bills last year, and 20% unable to pay a bill in 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 and resilience. Future costs are expected to rise further due to a projected nearly 16% increase in electricity demand over the next five years, fueled by electrification, manufacturing, and data centers. Additionally, reliance on natural gas has increased vulnerability to price volatility, which has been over twice as large since 2021 compared to the 2008-2020 period.
• Governors in at least 14 states have implemented actions since 2023 to address affordability. Examples include Governor Healey of Massachusetts strengthening demand response and energy efficiency programs like ConnectedSolutions and the Home Energy Audit and Weatherization program; 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.
• Certain common affordability measures may be ineffective or counterproductive. One-time bill credits may not address underlying issues and can hinder progress if funded by cutting other customer programs. Re-allocating funds between weatherization and energy efficiency rebates may not change the status quo. Furthermore, delaying the retirement of coal plants to avoid stranded asset costs may result in ratepayers continuing to pay for uneconomic plants, making securitization a potentially better alternative.

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} }