JOE TROTTER: How Soaring Prices Cast A Pall Over Holiday Cheer

JOE TROTTER: How Soaring Prices Cast A Pall Over Holiday Cheer

Joe Trotter on December 26, 2023

The holiday season is here, and Americans are preparing for a time of joy, family, and celebration. But beneath the surface of festive anticipation lies growing concerns that dampen the holiday spirit – the relentless surge in energy prices caused by big government regulations.

As state and federal authorities push an electrification agenda and an all-out elimination of oil and natural gas, one of the most tangible impacts of high energy prices rests in the realm of heating homes. As temperatures drop, households brace for higher heating bills, especially in states like Massachusetts, Rhode Island, Connecticut, and New Hampshire, (California has the highest), which are paying the highest electricity prices in the continental United States – approximately 52% more per kilowatt hour than the average American. The question is why?

ALEC’s recently published Energy Affordability Report, an examination of energy policies in all 50 states, found that states with higher electricity prices have two factors in common – carbon credits and renewable mandates.

Carbon credits are generated when the government limits the amount of carbon dioxide power plants are allowed to produce.  If there is a surplus, the credits can be auctioned off. Ultimately, the cost of meeting or missing those limits is passed onto consumers in the form of higher electric bills. Renewable mandates, on the other hand, are when states mandate that a certain amount of their electricity comes from renewable sources like wind or solar. Such mandates disregard more optimal and economical options in the name of regulations.

New York is a great example of over-regulation driving up prices. Sitting on one of the richest natural gas deposits in the country, New York chose to ignore those cheaper and more readily available resources and mandate that 70% of their power come from renewables by 2030. They also suffer from one of the highest tax rates in the country that subsidize boondoggles like the state’s offshore wind program, which was shuttered after development costs skyrocketed. New York is also required to achieve zero emissions by 2040. Suffice to say, the Empire State should be seeing significantly larger electric bills in the very near future.

But New York is not alone. Blue state Americans across the country are finding their home heating bills increasingly burdensome, with some forced to choose between comfort and an already tight budget. In Illinois, for example, home gas bills are expected to reach $133 per month, far above the projected $106 U.S. average.

Meanwhile, despite gas prices falling from last year’s historic highs, regulations and pledges to upend fuel producers have raised the cost of almost every good, food, and service. Businesses, already grappling with increased operational costs, are passing the burden on to consumers in the form of higher prices. In New York and Chicago, for example, families are paying between 70 and 90 cents more than average for a gallon of milk despite their close proximity to dairy producers. The primary driver of that increase? The states’ higher fuel prices.

With rising geopolitical tensions and supply chain disruptions over the last several years, domestic policies imposed by our elected officials also shoulder some of the blame. Most northeast states joined the interstate Regional Greenhouse Gas Initiative, an incredibly flawed, counter-productive emissions tax scheme that drives up electricity costs across the country.

Making matters worse, the Biden administration’s moratoriums on drilling in certain federal waters and pledges to curtail fossil fuels inject uncertainty into the energy sector, contributing to the supply-demand imbalance. Producers, wary of regulatory hurdles, are hesitant to commit time and money to projects that could alleviate the energy strain, which will impact the nation’s economy in the years to come.

As we enter this holiday season, we must recognize the hardships high energy prices produce. Though they are our current reality, they do not have to be our future. Policymakers should prioritize stability and affordability by lifting burdensome regulations and unleashing their economy with a free-market fervor that celebrates rather than frustrates energy production. We are, after all, in the season of giving. So, let’s give the gift of energy affordability and make the yuletide a little easier for one and all.

Joe Trotter is the American Legislative Exchange Council (ALEC) Energy, Environment, and Agriculture Task Force Director. With more than a decade of policy, campaign, and communications experience focused on energy and the environment, he most recently authored the 3rd Edition of ALEC’s Energy Affordability Report.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.