Study Finds Renewable Mandates Drive Higher Electricity Bills and Grid Risks

A study by Michael Greenstone, former chief economist of the Obama Council of Economic Advisers, and colleagues at the University of Chicago examined the impact of Renewable Portfolio Standards across the United States. Using state-level data, they determined that these mandates lifted retail electricity prices by 11% after seven years and 17% after twelve, with costs accelerating over time. The research attributes the price hikes to the forced early retirement of dispatchable coal, natural-gas and nuclear plants, which are replaced by intermittent wind and solar that require full-time backup.

Consequently, high-mandate states such as California, New York, Massachusetts, Connecticut and Rhode Island experience higher rates and occasional grid rationing, while low-mandate states like Idaho, Utah, Nebraska, North Dakota and Louisiana keep prices low and reliability high. The study also notes that carbon reductions achieved through these mandates cost between $130 and $460 per ton, far above market prices. It concludes that while emissions fall, the approach is economically inefficient and jeopardizes grid stability.