States Take the Lead on Energy Policy as Federal Support Wanes
As the Trump administration's energy policies take effect, states are emerging as key players in crafting responsible energy strategies. The federal government's actions, including legislation and executive orders, have weakened agencies, put $14 billion in clean energy investments at risk, and caused disruptions through tariffs and cuts to energy relief programs.
According to Third Way, a climate and energy organization, the need for state-level action is critical. This year, three-quarters of Americans say their home energy costs have risen. Additionally, six months into the president's conflict with Iran, gasoline and diesel prices have repeatedly set records, with no clear end in sight.
The administration has largely ignored affordability concerns. However, states are dealing with increasing electricity demand from data centers and are implementing creative solutions to expand generation and transmission capacity.
States are turning vague promises of "ratepayer protection" into concrete measures that make data centers pay for the energy they use. Arizona, Colorado, Michigan, New Jersey, North Carolina, Pennsylvania, and Virginia are either planning or have enacted energy pricing rules to ensure large power users cover their costs and prevent residential customers from subsidizing them.
In Pennsylvania, Governor Josh Shapiro has intervened to block rate hikes while advocating for broader reforms. In Massachusetts, Governor Maura Healey; Arizona Governor Katie Hobbs; North Carolina Governor Josh Stein; and Maine Governor Janet Mills have established expert task forces to improve utility accountability, streamline energy investment, and stop data centers from shifting costs to consumers.
Beyond addressing existing hurdles, states are backing innovative technologies. Many innovators, investors, and businesses are eager to fill the gap left by federal retreat, particularly when it helps their governors and legislatures tackle challenges. They aim to boost investment and create jobs in forward-looking energy sectors.
For example, North Carolina is exploring enhanced rock weathering, a promising agricultural method that can increase crop yields and remove carbon dioxide from the air. Third Way recently brought together state agencies, Governor Stein's office, the mining industry, agribusiness, climate NGOs, and universities to discuss how this practice can benefit local businesses and farmers. North Carolina's approach could serve as a model for other states looking to engage stakeholders and attract innovators.
States have a history of stepping up during energy crises. The Massachusetts Clean Energy Center and the New York State Energy Research and Development Authority were established in response to the oil shocks of the 1970s. Today, with global conflicts, soaring energy demand, unreliable infrastructure, and a disjointed federal response, states are again rising to the occasion and keeping their energy economies stable.
They possess deep expertise and talent, can focus on local solutions, and seek regional cooperation. They have convened utility representatives, project developers, labor groups, environmental NGOs, and state officials to create practical and lasting policies.
Americans cannot afford to wait for congressional legislation or presidential action that may take years. Advocacy groups like Third Way should also not wait. By working with states to refine ideas and promote effective policies, alongside opposing the Trump administration's harmful actions and pushing for needed policies, this effort can benefit voters nationwide.
Jonathan Lane is the deputy director for Innovation, Francesca Hsie is deputy director for Electricity at Third Way, and Nicholas Yoon is a policy advisor for Innovation at Third Way.
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