For most of us, “energy policy” starts and stops with one question: how much was the electric bill last month? That is a fair place to begin, but it barely scratches the surface. The same system that powers your home runs the hospital, keeps food cold from farm to fridge, moves goods across the country, and underpins the factories, data centers, and military bases the nation depends on. Energy is not one sector among many; it is the infrastructure beneath the economy, food, health, and national security alike.

That is what makes energy policy both consequential and hard. We ask four things of our energy system at once: that it be reliable, so the lights come on every time; resilient, able to withstand storms, cyberattacks, and surging demand; affordable, since energy costs ripple into the price of nearly everything; and clean, produced as responsible stewards of our air, water, and land. Each goal is reasonable alone, but they pull against one another, and every real decision is a tradeoff among them, a tension only intensifying as AI, electric vehicles, and the electrification of daily life drive demand upward. This brief takes up not which goal matters most, but how communities and policymakers can balance all four at once.

CASE STUDY

On the morning of August 8, 2023, the historic port town of Lahaina, Maui, began to burn. Before the day was over, 102 people were dead, and more than 2,200 buildings were gone, making it the deadliest wildfire the United States had seen in over a century. After a nearly year-long investigation, county and federal officials traced the disaster to a single cause: a Hawaiian Electric power line that broke in high winds, throwing sparks into dry brush. Crews believed they had put the morning fire out, but it rekindled that afternoon and raced into town.

What turned an equipment failure into a catastrophe was a chain of decisions and conditions around it. Hurricane Dora was passing far to the south, and its winds, combined with drought, had prompted the National Weather Service to issue a red-flag fire warning. Yet the utility had chosen not to adopt a program to shut off power preemptively in dangerous weather, having concluded such measures were not the right fit for its islands. The eventual $4 billion settlement named seven parties, from the utility to the county to large landowners, a reminder of how many hands touch the system that keeps the lights on.

Lahaina is a tragedy of its own, but it is also a window into how much rides on the energy system and how many forces shape it. Hawaii’s circumstances are not the mainland’s: an isolated island grid with no neighboring states to draw power from, a long dependence on imported oil for most of its electricity, and a landscape and climate that can turn a single maintenance decision into a matter of life and death. Every region faces its own version of this. The Gulf Coast contends with hurricanes, the West with drought and wildfire, the Upper Midwest with punishing cold, and each of these realities shapes which energy sources make sense and what the grid must be built to survive.

That is the nature of energy in America. It is produced from many sources, natural gas, nuclear, coal, wind, solar, and hydropower among them, in a mix that varies widely from one place to the next. It is shaped by many hands: utilities, regulators, grid operators, landowners, investors, and the communities that live alongside the wires and power plants. And it is bound up with the land, water, and weather of each region, which together determine both what is possible and what is at risk. Infrastructure built for an earlier era is now straining against rising demand, a changing generation mix, and shifting global supply chains. The choices made now, about how the country produces, moves, and uses energy, will shape not only the reliability and cost of power in American homes, but the nation’s standing in an increasingly competitive global race for the resources behind every major energy technology.

WHY IT MATTERS: HOW THE LIGHTS COME ON

Most of us can find the number on our electricity bill but not explain it. Behind that single charge sits one of the most complex systems ever built, and understanding even its basics is what turns a frustrated ratepayer into an effective citizen.

So consider a plain question: what did you pay for power last month, and do you know why? The electricity that reached your home was not made by one source but by a shifting mix of natural gas, nuclear, wind, solar, and hydropower, balanced minute by minute by grid operators. What you paid for it depends heavily on where you live. In much of the country, a single regulated utility produces, delivers, and bills for your power, and a state commission approves the rate. In restructured, or “deregulated,” states, the utility still owns the wires and handles outages, but you can choose the company that supplies the electricity itself. Two households paying very different amounts may simply live under two different sets of rules, and the difference falls hardest on the households that can least afford it.

That is why this matters. The goals worth wanting from energy, that it be reliable, resilient, affordable, and clean, are not balanced in Washington alone. They are balanced in rate cases, zoning hearings, and statehouses, in decisions most people never see. Knowing how the lights come on is the first step to having a say in what they cost and where they come from.

See Kite and Key Media’s video on the challenges facing America’s aging electrical grid (7 minutes):

HOW THE ENERGY MIX HAS SHIFTED

The United States has never run on a single energy source. Over nearly 250 years, the mix has changed again and again, and a new US Energy Information Administration history of U.S. energy use lays out the full arc. Seeing that sweep helps explain both where we are today and why energy transitions unfold over decades, not years.

First, a distinction worth getting straight: production versus consumption. These two words are easy to confuse, and the difference matters. Production is how much energy the country pulls from the ground or captures from wind, water, and sun. Consumption is how much energy Americans actually use, in homes, vehicles, businesses, and power plants. They are not the same number, because the United States both imports and exports energy. For most of the last century the country consumed more than it produced and imported the difference. That flipped in 2019 when, thanks to the shale boom, the United States produced more energy than it consumed for the first time since 1957. A related trap: a source’s share of what we produce, its share of what we consume, and its share of the electricity we generate can each be a different number, so it is always worth asking which one a statistic refers to.

The long arc (measured by consumption). Wood heated, lit, and cooked for American households through most of the 1800s. Coal overtook it around 1885, powering the railroads, steel mills, and factories of the industrial age. Petroleum arrived with the oil booms of the early 1900s and, by 1950, had passed coal to become the nation’s most-used energy source, driven above all by cars and air travel. Natural gas spread alongside it as pipelines reached across the country, becoming a mainstay for heating homes and generating electricity. Nuclear power joined the mix after the first commercial reactor came online in Pennsylvania in 1957, offering large-scale electricity without combustion; today it supplies roughly 9% of the energy the country consumes, a share that has held broadly steady for two decades.

The shale revolution and the rise of renewables. The 2000s reshaped the picture again. Horizontal drilling and hydraulic fracturing unlocked vast domestic natural gas and crude oil, making the United States the world’s largest producer of both and, between 2011 and 2020, prompting the conversion or replacement of more than 100 coal-fired power plants with natural gas. Renewables climbed steadily over the same period. By EIA’s accounting, renewable energy use surpassed nuclear in 2022 and coal in 2023 for the first time since the 1880s, and wind and solar together now supply more energy than hydropower. Coal has moved the other way, with both its share of what Americans consume and its level of domestic production falling sharply, undercut by cheaper natural gas and growing renewables.

Where that leaves us. Even after all this change, fossil fuels still account for about 82% of the energy the country consumes, while natural gas has become the single largest source of electricity generation. The throughline across 250 years is consistent: each source gained ground when it proved more abundant, more affordable, or more practical than what came before, and each transition took hold only when economics, technology, and policy lined up. That same dynamic is shaping today’s mix as demand climbs to power data centers, electric vehicles, and a more electrified economy.

Watch Kite and Key Media’s video on why fossil fuels have endured despite the growth of renewables (9 minutes):

ENERGY CONSUMPTION: GROWTH AND FORECAST

Energy consumption is simply the total amount of energy used across an economy over a period of time. It includes electricity in homes, gasoline in vehicles, natural gas in factories, and every other form of energy put to work. The U.S. Energy Information Administration (EIA) tracks and publishes these figures regularly, and its Short-Term Energy Outlook provides rolling forecasts of where consumption is headed.

For most of the 2000s and 2010s, U.S. energy consumption was essentially flat. Efficiency improvements in appliances, buildings, vehicles, and industrial equipment offset growth that would otherwise have accompanied a growing population and economy. That era has ended. According to the EIA, electricity consumption reached an all-time record in 2024 and is forecast to keep growing through 2026. The drivers are new: electric vehicles, the electrification of home heating and cooling, the broader shift of commercial and industrial activity toward electricity, AI and data centers.

Forecasting energy demand matters because building the infrastructure to produce and deliver energy takes years. Power plants, transmission lines, pipelines, and substations cannot be built overnight. When demand grows faster than forecasters anticipated, the gap creates real pressure on grid reliability and energy prices.

WHERE ELECTRICITY COMES FROM, AND WHAT IT COSTS THE ENVIRONMENT

Many people think of electricity and energy as the same thing. They are not. Energy is the broader category: it includes gasoline, natural gas, coal, oil, and electricity. Electricity is one way energy is delivered, and it has to be generated from some primary source before it can reach your home.

That generation process is where the environmental story begins. Electricity is made at power plants by converting a fuel source into electrical current. The fuel can be coal, natural gas, uranium, moving water, wind, or sunlight. Each source has a different cost, reliability profile, and environmental footprint.

According to the EIA, total U.S. utility-scale electricity generation was about 4.43 trillion kilowatt-hours in 2025. The mix to generate electricity is:

• Natural gas: 41% — burned in turbines to produce electricity, releasing CO2 in the process
• Renewables (wind, solar, hydro, biomass, geothermal): 24% — no direct emissions during generation, but environmental costs in manufacturing and materials
• Nuclear: 18% — no CO2 during generation, but involves uranium mining and long-term waste management
• Coal: 16% — the most carbon-intensive source, down from 52% in 1990
• Petroleum and other sources: about 1% — petroleum is used mainly in older peaking units and remote or backup generation

What many people do not consider is that even “clean” electricity sources carry environmental costs upstream. Solar panels require silicon, silver, and other materials; batteries require lithium, cobalt, nickel, and graphite. According to the World Wildlife Fund, dramatically scaling up solar and wind will require significantly increasing the global supply of copper, cobalt, lithium, and graphite, and obtaining those materials through mining carries its own risks of land disturbance, habitat loss, and water contamination.

This does not mean renewable energy is worse than fossil fuels. But it does mean that every energy source carries tradeoffs, and fact-based energy policy requires acknowledging all of them.

Kite and Key Media explains where America’s electricity actually comes from today (Less than 1 minute):

Kite and Key Media explores how electricity sources vary dramatically by state (3 minutes):

THE ELECTRIC GRID: HOW ELECTRICITY REACHES YOUR HOME

Generating electricity is only the first step. Getting it from a power plant to a home or business requires an elaborate system of infrastructure commonly called the electric grid.

Understanding the grid helps explain why energy policy decisions made in Washington or at a state capital can affect the reliability and cost of electricity in a community hundreds of miles away.

The grid has three main parts:

• Generation: Power plants that produce electricity from fuel, natural gas, water, wind, or sunlight.
• Transmission: High-voltage lines that carry electricity over long distances to the regions where it is needed.
• Distribution: Lower-voltage lines and transformers that step electricity down and deliver it to homes and businesses.

The U.S. grid connects thousands of power plants to hundreds of millions of customers through about 600,000 miles of transmission lines and 5.5 million miles of local distribution lines. Large portions of this infrastructure were built in the 1950s and 1960s and are reaching the end of their expected lifespan.

The grid is not one national system. FERC regulates interstate electricity transmission and wholesale power markets. NERC, a nonprofit reliability organization operating under FERC oversight, develops and enforces mandatory reliability standards across the bulk power system, covering nearly 334 million people. Regional transmission organizations and independent system operators manage day-to-day grid operations, balancing supply and demand in real time.

States manage their grids in fundamentally different ways. States manage their energy supply through Public Utility Commissions (PUCs), which regulate the utilities that deliver electricity and natural gas. PUCs set rates, approve infrastructure investments, review utility plans for meeting future demand, and protect consumers from high costs. In Texas, the Public Utility Commission of Texas oversees ERCOT, the grid operator managing about 90% of the state’s electricity. In California, the California Public Utilities Commission shapes the state’s clean energy transition. In states without deregulated markets, a single vertically integrated utility often handles generation, transmission, and distribution under PUC oversight.

EMISSION AND THE DEBATE OVER FOSSIL FUELS

Burning fuel to produce energy releases gases and particles into the air. Some are immediately harmful to health: sulfur dioxide, nitrogen oxides, and fine particulate matter contribute to smog and respiratory disease. These are the pollutants the Clean Air Act was designed to address, and air quality in the United States has improved dramatically since the 1970s as a result.

The other category is greenhouse gases, primarily carbon dioxide (CO2). CO2 is released whenever fossil fuels are burned. It is not immediately harmful to breathe at normal levels, but it accumulates in the atmosphere and has heat-trapping properties. Scientists and policymakers at institutions including the Intergovernmental Panel on Climate Change track CO2 closely because of its potential role in long-term changes to global temperatures. There is ongoing scientific and policy debate about the pace, scale, and precise consequences of those changes.

According to the EPA, U.S. greenhouse gas emissions in 2022 totaled about 6,343 million metric tons of CO2 equivalent. Measured as direct emissions (counted at the source where they occur), the six sectors were:

• Transportation: 28% — cars, trucks, planes, and ships, over 94% powered by petroleum. Emissions come directly from the tailpipe.
• Electric power: 25% — power plants burning coal and natural gas; in 2022, about 60% of U.S. electricity came from fossil fuels. These emissions occur at the plant, not in the home or business that uses the electricity.
• Industry: 23% — manufacturing and production burning fossil fuels directly on site, plus chemical processes such as making steel and cement.
• Commercial and residential buildings: 13% — fossil fuels burned on site for heat, plus refrigeration and cooling gases. This excludes the electricity these buildings use, which is counted under electric power.
• Agriculture: 10% — livestock, agricultural soils, and rice production release methane and nitrous oxide, more potent than CO2 over short periods.
• Land use and forestry: a net sink — U.S. forests and lands absorb more CO2 than they emit, offsetting about 13% of total gross emissions.

The debate over fossil fuels is not simply an environmental debate. It involves jobs in energy-producing communities, the economics of manufacturing and transportation, energy prices for households and businesses, and which technologies can realistically replace fossil fuels at the scale and reliability Americans depend on. The EIA reports that U.S. energy-related CO2 emissions declined by almost 1% in 2024, reflecting both progress from the shift away from coal and the continued central role of natural gas across the economy.

GLOBAL ENERGY CONSUMPTION AND SOURCES

The United States is the second largest energy consumer in the world, behind China. How other countries generate energy matters because emissions anywhere contribute to the global atmosphere, and because energy competition shapes geopolitics, manufacturing costs, and international trade.

United States

The United States generates about 4 trillion kilowatt-hours of electricity a year, which is roughly one-eighth of the world’s total electricity consumption of about 30,000 terawatt-hours. Fossil fuels generate about 60% of U.S. electricity, a share that is declining as renewables grow.  The U.S. is the world’s largest producer of natural gas and crude oil and has been a net energy exporter since 2019.

China

China runs the world’s largest power system, and it remains heavily coal-dependent: coal generated close to 60% of the country’s electricity in 2024, with renewables supplying roughly a third and nuclear and natural gas making up the remainder.

China is simultaneously the world’s largest coal consumer (over one-third of all the coal consumed globally) and the world’s largest installer of new solar and wind capacity. The country now consumes nearly 40% more coal than the rest of the world combined, largely for power generation, and is burned by power plants in China.

Africa

In 2024, roughly 730 million people around the world still lived without electricity, and about 80% of them were in sub-Saharan Africa. Taking Africa as a whole, close to two in five people, some 600 million, have no power at all; in sub-Saharan Africa alone, roughly half the population still lacks it. The disparity is clearer in relative terms: Africa is home to nearly one-fifth of the world’s population but uses only about 6% of the world’s energy. For hundreds of millions of people, the energy debate is not about which source is cleanest but about having any reliable source at all. That reality shapes how developing nations weigh the tradeoff between affordable power and environmental goals.

ENERGY AND NATIONAL SECURITY

Energy is not only an economic and environmental issue. It is a national security issue. The availability of reliable, affordable energy is foundational to military readiness, economic stability, and the functioning of every critical system Americans depend on. Increasingly, it is also central to the technological competition between the United States and China.

The Compute Race

Computing power has become a yardstick of national strength, and data centers are where that power physically lives. On sheer scale, the United States leads decisively: the Federal Reserve estimates the country was home to about 4,049 data centers in 2024, more than the European Union, the United Kingdom, and China put together, and it holds roughly 74% of the world’s most advanced AI computing power. That lead is one of America’s strongest cards in the AI era.

But it rests on something the United States does not dominate: electricity. The same Federal Reserve analysis notes that China overtook the United States on generating capacity over a decade ago and has widened the gap since, with about 3,200 gigawatts of capacity to America’s 1,293, and in 2024 alone it added 429 gigawatts of new capacity, more than fifteen times the U.S. figure. A group of Brookings Institution scholars frames the contrast plainly: the United States leads in advanced AI chips while China leads in the power needed to run them, a divide some call the “electron gap” that could shift where the world’s AI computing ultimately happens. In short, America’s compute edge is real, but keeping it depends on building and holding onto the energy infrastructure to sustain it. See The Policy Circle’s Data Centers Brief.

The Grid as Infrastructure Under Threat

The U.S. electric grid is among the most critical pieces of national infrastructure and among the most targeted. According to reporting on NERC data, the number of vulnerable points on the grid is growing by roughly 60 per day as the grid expands and incorporates new digital technologies, and cyberattacks on utilities rose sharply in 2024. In 2026, CSIS documented that the Iran conflict specifically heightened cyber threats to U.S. energy infrastructure. With more than 80% of U.S. energy infrastructure owned by the private sector, coordination between government and industry is essential.

Critical Minerals and Foreign Dependence

Producing energy, whether from fossil fuels or from wind, solar, and batteries, requires minerals (copper, cobalt, lithium etc), many of them processed overwhelmingly outside the United States. China also dominates the processing of critical minerals needed for clean energy technologies, motors and turbines, including rare earth elements and battery materials, with significant implications for U.S. energy and economic security. As the Carnegie Endowment for International Peace notes, the U.S. does not have sufficient domestic reserves of all critical minerals, so supply chain security requires a combination of domestic investment, recycling, and strategic international partnerships.

Energy Independence as Leverage

The United States became a net energy exporter in 2019, sending out more energy than it took in for the first time since 1952, and it has held and widened that position since, reaching a record trade margin in 2024. That turnaround, powered by the shale revolution, lessened the country’s exposure to foreign supply shocks and gave it more weight in international dealings. Europe’s experience after Russia invaded Ukraine showed the other side of that coin: nations that leaned heavily on Russian gas absorbed severe economic pain and watched their diplomatic options narrow. As a leading exporter of liquefied natural gas, the United States helped its European allies replace much of the Russian supply they lost.

FEDERAL

The Constitutional Foundation

Energy policy in the United States is not made in one place. Congress writes the laws that define what federal agencies can and cannot do. Agencies issue regulations within those boundaries and enforce them. The president appoints agency heads who shape how agencies exercise their authority. Courts review whether agencies have acted within their statutory limits. And states implement federal standards while often layering their own policies on top. This shared system of governance is called federalism, and understanding it is essential to understanding why energy policy feels so complicated, moves so slowly, and is so frequently contested.

PBS Crash Course Government explains how federalism divides federal and state authority (9 minutes):

The Constitution does not mention energy. Yet the federal government plays a central role. Three provisions form the constitutional foundation, with a fourth acting as the counterweight.

The Commerce Clause (Article I, Section 8) grants Congress power to regulate commerce among the states. Because energy routinely crosses state lines through pipelines, transmission lines, and tankers, it falls squarely within interstate commerce. This is the primary basis for federal authority over energy markets, pricing, and infrastructure.

The Property Clause (Article IV, Section 3) gives Congress power over federal property. The federal government owns roughly 28% of all U.S. land, much of it in the West, where significant oil, gas, coal, geothermal, and wind resources are located. This gives Congress and the executive branch broad authority over energy development on public lands.

The Supremacy Clause (Article VI) establishes federal law as supreme. When federal energy regulations conflict with state policies, federal law generally prevails, a doctrine known as preemption. The Supreme Court’s 2022 decision in West Virginia v. EPA showed how actively these boundaries are litigated; the Court held the EPA had exceeded its authority by attempting to mandate broad shifts in electricity generation across the economy.

The Tenth Amendment is the counterweight. It reserves to the states all powers not granted to the federal government. Retail electricity pricing, local distribution, land use decisions, and intrastate transactions are generally state matters. Texas’s decision to operate its grid largely outside the interstate system, and thus largely outside FERC oversight, is a direct expression of this constitutional division.

The Federal Agencies

At the federal level, no single agency handles all aspects of energy. Authority is distributed across several departments and independent commissions, each with a mandate defined by legislation.

Department of Energy (DOE)

The DOE advances energy technology, oversees nuclear weapons programs, manages the federal power marketing administrations, and funds research. It was established by the Department of Energy Organization Act of 1977, signed by President Carter in response to the 1973 OPEC oil embargo. It funds the national laboratories, publishes data through the EIA, manages the Strategic Petroleum Reserve, runs the Loan Programs Office, and advances domestic critical minerals supply.

Federal Energy Regulatory Commission (FERC)

An independent agency that regulates interstate transmission and wholesale pricing of electricity, natural gas, and oil. Its authority derives from the Federal Power Act (1920), the Natural Gas Act (1938), and the Energy Policy Act of 2005. Five commissioners are appointed by the President, with no more than three from the same party. FERC works closely with North American Electric Reliability Corporation (NERC), which develops and enforces mandatory reliability standards covering nearly 400 million people.

Environmental Protection Agency (EPA)

Established in 1970, the EPA shapes how energy is produced and consumed through the Clean Air Act, the Clean Water Act, and the National Environmental Policy Act (NEPA), which requires environmental review of major energy projects. The boundary of EPA authority is frequently litigated, including in West Virginia v. EPA (2022).

Department of the Interior (DOI)

The DOI manages roughly 480 million acres of federal land and 1.7 billion acres of the Outer Continental Shelf. Through the Bureau of Land Management, the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, and the Fish and Wildlife Service, it decides whether to permit drilling, mining, and wind and solar development on federal land.

Nuclear Regulatory Commission (NRC)

An independent agency established by the Energy Reorganization Act of 1974, the NRC licenses and oversees nuclear power plants, regulates nuclear waste, and sets safety standards. As interest in small modular reactors grows, NRC licensing timelines are increasingly central to the energy debate.

Congress: The Committees That Write Energy Law

Congress sets the framework within which all of these agencies operate. The key committees with jurisdiction over energy policy in Congress are:

• Senate Energy and Natural Resources: energy development, nuclear energy, public lands, and oversight of the DOE, EIA, FERC, and Interior bureaus.
• Senate Environment and Public Works: the EPA, Clean Air Act, Clean Water Act, and environmental regulations affecting energy.
• House Energy and Commerce: interstate energy commerce, nuclear energy, and the EPA.
• House Natural Resources: the Interior Department, public lands, offshore energy, and mining.
• House Science, Space, and Technology: DOE research programs, the national laboratories, and energy innovation policy.

Financial Incentives: How Government Shapes Energy

One of the most consequential ways the government influences energy is not through regulation but through money: tax incentives, subsidies, grants, and loan guarantees. These tools encourage both fossil fuel production and clean energy development, and they are authorized by all three branches working in different capacities. Congress is the primary actor, the only branch that can create tax credits and authorize spending. The President can direct agencies through executive orders. Agencies write the rules that determine who actually qualifies.

Incentives for Fossil Fuels

The federal tax code does not simply subsidize fossil fuel production; nearly half of its fossil fuel benefits are designed to cut emissions. A 2026 Congressional Research Service report, using Joint Committee on Taxation estimates, puts the largest of these benefits at about $19.1 billion over fiscal years 2025 through 2029, roughly $3.8 billion a year, or less than one-tenth of one percent of federal spending. The single biggest item, about $9.2 billion, is a credit that pays companies to capture carbon dioxide and store it underground rather than release it, though part of that flows to industrial and direct-air-capture facilities rather than to fossil fuel producers. The traditional production incentives are smaller: percentage depletion, which lets certain oil and gas producers deduct a fixed share of a property’s income instead of their actual costs, runs about $3.4 billion, and the expense of exploration and development (including drilling) costs about $2.3 billion.

Incentives for Clean Energy

The two foundational tools are the Production Tax Credit (first established 1992) and the Investment Tax Credit (first established 1978). The Inflation Reduction Act of 2022 represented the largest federal clean energy investment in U.S. history, roughly $369 billion. In July 2025, the One Big Beautiful Bill Act significantly modified many of those credits, accelerating the phase-out of incentives for wind and solar while preserving or extending others such as nuclear, geothermal, and clean fuels.

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides a searchable database of both federal and state energy incentives, and is one of the most useful tools for understanding what financial support exists for a specific technology in a specific state.

STATE, COUNTY AND LOCAL GOVERNMENT

While the federal government sets the legal framework, the decisions that most directly shape how energy is generated, where infrastructure is built, and what residents pay happen closer to home. States, counties, and cities hold remarkable authority over energy policy, and that authority is growing as electricity demand rises.

The State Role: Regulation, Planning, and Standards

Public Utility Commissions. Every state has a PUC that regulates utilities that deliver electricity and natural gas. The National Association of Regulatory Utility Commissioners (NARUC) represents commissions in all 50 states. NARUC is the national organization through which state regulators share best practices and coordinate on issues that cross state lines, which makes it a useful window into how commissions nationwide are approaching new challenges like data center load growth and utility rate design.

Integrated Resource Planning. Most states require utilities to file multi-year plans showing how they will meet projected demand. The North American Electric Reliability Corporation (NERC), the nonprofit body that sets and enforces reliability standards for the grid, found in its 2024 Long-Term Reliability Assessment that summer peak demand is expected to rise about 15% over the next decade, a challenge that falls squarely on state regulators.

Renewable Portfolio Standards (RPS). Iowa enacted the first Renewable Portfolio Standard (RPS) in 1983. According to the EIA, as of December 2025, 28 states and DC have an RPS, and 23 states plus DC have 100% renewable or clean electricity goals.

Deregulation and Market Structure. States decide whether their markets are regulated or deregulated. Texas operates one of the most deregulated markets through ERCOT; other states maintain traditional regulated utilities. This structural choice has profound consequences for prices, new generation, and resilience.

State Energy Offices. Every state has one, coordinated by the National Association of State Energy Office (NASEO), handling planning, efficiency, and emergency preparedness.

No state is an island. Electricity flows freely across state lines and national borders, so the power lighting your home may be generated hundreds of miles away. Nearly 10% of all U.S. electricity is traded between states, and the country also imports power from Canada, most of it hydropower, enough to supply several million homes, with states across the Northeast especially reliant on it. This interdependence is why a state utility commission’s decisions never operate in isolation: demand or policy in one place can raise prices or strain supply in another, and regional grids and cross-border trade shape reliability as much as any single state’s choices.

The County and Local Role: Siting, Zoning, and Community Decisions

Zoning and Land Use. Local governments decide whether a solar farm, wind turbine, battery facility, pipeline, or data center can be built and under what conditions. According to the World Resources Institute, 37 states give local governments authority over solar and wind siting, and by the end of 2024, at least 450 counties across 44 states had adopted significant restrictions.

State Preemption. Some states have created centralized siting authorities that can override local zoning. New York’s Office of Renewable Energy Siting has exclusive authority for major projects of 25 megawatts or more. This is a genuinely contested area: communities feel centralized siting removes their voice, while developers argue fragmented local opposition slows needed infrastructure.

Community Choice Aggregation. In states that allow it, local governments can pool residents’ purchasing power to negotiate directly with energy suppliers, often to secure lower rates or more renewable energy.

Meeting Rising Demand Locally. Counties evaluating large data center proposals must weigh economic benefits against demands on water, the grid, and local infrastructure. Learn more in The Policy Circle’s Data Centers Brief.

Permitting: The Process That Decides What Actually Gets Built

Of all the ways the government shapes energy, permitting may be the least understood and the most consequential. A power plant, transmission line, pipeline, or solar farm can be fully financed, broadly supported, and economically sound, and still take a decade or never get built, because of how long it takes to move through environmental review, agency sign-off, and the litigation that often follows. Permitting is the difference between a policy goal and a finished project.

At the federal level, most large energy projects must complete review under the National Environmental Policy Act (NEPA), enacted in 1970, which requires agencies to study a project’s environmental effects before approving it. NEPA is a procedural law: it does not dictate an outcome, but it requires analysis, public comment, and documentation. Supporters see it as essential protection for communities and ecosystems. Critics note it has become the most litigated environmental statute in the country. A Breakthrough Institute analysis of nearly 400 NEPA cases found that lawsuits delayed energy projects by about 3.9 years on average between 2013 and 2022, even though agencies won roughly 71% of those challenges. Other researchers caution that litigation is only one of several sources of delay, with financing and grid connection often mattering as much.

Permitting reform has become one of the rare genuinely bipartisan priorities in energy policy. In October 2025, a bipartisan group of more than a dozen governors, co-chaired by Oklahoma’s Kevin Stitt and Pennsylvania’s Josh Shapiro, urged Congress to streamline federal permitting in a “technology-neutral and apolitical manner that allows energy projects of all types to move forward.” In December 2025, the U.S. House passed the bipartisan SPEED Act (sponsored by Republican Bruce Westerman and Democrat Jared Golden) by a vote of 221-196, to modernize NEPA and set clearer deadlines for review and litigation. Its prospects in the Senate remain uncertain as of mid-2026.

Permitting certainty. Business groups have pressed the same case from the investment side. The U.S. Chamber of Commerce, through its Permit America to Build coalition, argues that the problem is not only how long reviews take but the uncertainty that hangs over a project even after approval. In the Chamber’s framing, businesses will commit the large private investments new energy infrastructure requires only if they have confidence that once all required permits are obtained, a project can actually be built and will not be undone later. It calls for “certainty from start to finish,” and, consistent with a portfolio approach, takes a technology-neutral position: the country needs, as the Chamber puts it, every possible electron from any source, and reversing permits already granted creates uncertainty that discourages investment across all energy types, not just one.

Where permitting happens matters as much as what is being permitted. Federal review under NEPA applies to projects on federal land or requiring federal approval. But a great deal of permitting is state and local: air and water permits issued by state environmental agencies, transmission-line siting approved by state commissions, and the local zoning and land-use approvals discussed above. A single project can require permits at all three levels, and a community’s most direct point of influence is usually the state and local stage, not the federal one.

Energy policy is not only about regulating what exists. It is also about creating the conditions for what comes next. Some of the most consequential shifts are not happening in Congress, but in laboratories, factories, and neighborhoods.

NUCLEAR INNOVATION: SMALLER, SAFER, AND CLOSER TO HOME

Nuclear energy provides roughly 18% of U.S. electricity and close to half of all carbon-free electricity. Existing plants are large, expensive, and slow to build. A new generation of technology is changing that calculus.

Small Modular Reactors (SMRs) are factory-built, transportable reactors that generate up to 300 megawatts. In 2023, NuScale Power became the first company to receive a design certification from the Nuclear Regulatory Commission (NRC), the federal agency that reviews and approves the safety of every U.S. reactor. The Tennessee Valley Authority then filed the first utility-led SMR construction permit application in 2025. Congress backed this momentum with the ADVANCE Act of 2024, which streamlined NRC licensing.

Fusion energy remains a longer-horizon frontier. Fusion is the process that powers the sun: it forces two light atoms (usually forms of hydrogen) to merge into a heavier one, releasing an enormous burst of energy. It is essentially the opposite of the fission used in today’s nuclear plants, which split heavy atoms apart, and it promises abundant, carbon-free power with no risk of meltdown and no long-lived radioactive waste. The challenge is that fusion requires heating fuel to roughly 100 million degrees, hotter than the sun’s core, and holding it stable long enough to produce net energy. In December 2022, the National Ignition Facility became the first experiment to get more energy out of a fusion reaction than the lasers put in, a milestone known as ignition. Private capital has since poured in, with cumulative investment in fusion companies reaching roughly $9.7 billion in public and private funding by mid-2025. Even so, as the Harvard Belfer Center cautions, major scientific and engineering hurdles stand between today’s experiments and a commercial power plant.

Watch Kite and Key Media’s video on the renewed promise of nuclear energy (6 minutes):

FEEDING ENERGY BACK: HOMES AND VEHICLES AS POWER PLANTS

Net Metering lets a homeowner with rooftop solar receive bill credits for excess power fed back to the grid. More than 6 million U.S. homes now have rooftop solar. The rate at which excess power is credited varies widely by state and is actively contested.

Virtual Power Plants (VPPs) coordinate thousands of rooftop solar systems, home batteries, EV chargers, and smart thermostats through software so they behave like a single power plant. According to the DOE, VPPs could supply 10% to 20% of U.S. peak demand by 2030.

Vehicle-to-Grid technology lets an EV battery discharge stored electricity back to the home or grid during peak demand and recharge when power is cheap. Several states, including California and New York, are developing V2G programs.

Energy debates often proceed as if there are only two sides: those who want more production and those who want a cleaner environment. In reality, the system involves a much broader set of actors, each with distinct interests.

• Federal and state governments set the legal framework through legislation, regulation, and permitting.
• Electric utilities generate, transmit, and deliver electricity. Investor-owned utilities are regulated monopolies; municipal utilities and rural cooperatives are governed by local boards.
• Independent power producers generate electricity but do not own the delivery wires, selling into wholesale markets.
• Grid operators (PJM, MISO, ERCOT, CAISO) balance supply and demand in real time; NERC sets reliability standards.
• Fuel and mineral producers supply coal, gas, uranium, lithium, cobalt, copper, and rare earths.
• Renewable developers build wind, solar, and storage, and increasingly face local siting friction.
• Technology companies and large industrial consumers operating data centers have become among the largest electricity buyers, reshaping regional grid planning.
• Environmental organizations advocate for reduced environmental impact and engage at every level.
• Consumer advocates represent residential ratepayers, with affordability as their central concern.
• Local governments and communities control siting and bear the most direct consequences of energy infrastructure.
• Financial institutions provide the capital that makes every energy project possible.

State energy choices are among the most consequential decisions made in the American government. They determine what residents pay, how reliable electricity is, whether the environment is protected, and whether communities share in the benefits of energy development or simply bear its costs.

Start with a fact so basic it is easy to overlook: modern life runs on electricity around the clock. The lights, the heat, the hospital, the water-treatment plant, the data centers behind everything we do online, none of them pause overnight or wait for the wind to pick up. That is why reliability is not one energy goal among many but the foundation the others rest on, and why the source of power matters so much. It is also why natural gas has become the backbone of the U.S. grid: it can be dispatched on demand, ramping up the instant it is needed. It is why nuclear power is drawing renewed interest, since it delivers large amounts of carbon-free electricity that runs continuously, day and night. And it is why wind and solar, valuable as they are, cannot carry the load alone.

Two ideas should anchor how state choices are judged. First, there is no single right energy mix; there is only the right mix for a given place. Electricity is best understood as a portfolio built from what a state actually has: abundant wind in the Plains, sun in the Southwest, hydropower in the Northwest, natural gas and nuclear where they make sense, combined so that reliable, dispatchable sources cover the moments intermittent ones cannot. A policy that ignores a state’s real resources, or bets against them, tends to cost more and deliver less.

Second, demand is rising after years of sitting flat, and it will keep climbing. Data centers, electric vehicles, and the steady electrification of daily life, the electric cars, electric stoves, and heat pumps that policy increasingly encourages, all draw on the same grid, and that electricity has to come from somewhere. This calls for a growth mindset from policymakers: the central test of state energy policy is no longer only how clean the mix is, but whether it is actually fostering enough new generation to keep power reliable and affordable as demand rises. We cannot electrify more of the economy while making it harder to build the power that electrification requires. In too many states, policy has moved to restrict certain sources faster than it has enabled new ones to replace them, a recipe for higher prices and tighter supply.

Two states illustrate how differently this can play out.

COLORADO: WHEN POLICY LEADS WITH EMISSIONS GOALS

The approach: set the target, then change behavior. Colorado’s energy policy begins with a climate destination and works backward. In 2019, the legislature passed House Bill 1261, writing into law one of the country’s more aggressive emissions schedules: a 26% cut by 2025, 50% by 2030, and 90% by 2050. A 2021 “Clean Heat” law then translated that ambition into a specific behavioral goal, moving homes and businesses off natural gas, by directing gas utilities to cut emissions 4% by 2025 and 22% by 2030, with the Public Utilities Commission extending the standard to a 41% cut by 2035 in December 2025. The theory is straightforward: set binding targets, and the market and utilities will find the way to meet them, shifting customers toward electric heating and cleaner power along the way.

The observed results. The reductions the policy seeks require replacing or electrifying a great deal of existing gas heating and generation, and that transition has proven both more expensive and slower than projected. Electricity grew costlier nationwide over this period (residential prices rose roughly 40% between 2021 and 2025), so some increase was expected. But Colorado’s bills climbed too, about 30% between March 2021 and March 2026, and larger increases may be coming: reviewing Xcel Energy’s plan to invest roughly $22 billion over five years, the chair of the Public Utilities Commission warned rates could rise as much as 72%. Meanwhile the emissions goals themselves are slipping: the state officially missed its first major milestone at the end of 2025.

The lesson. Colorado illustrates a recognizable pattern in emissions-first policy: the destination is legislated up front, while the cost and pace of reaching it prove harder to control than the targets imply. Mandating an outcome does not by itself make the path to it cheap or fast, especially when the goal depends on changing how millions of households heat their homes. This is not an argument against the goals; clean air and lower emissions are widely shared aims. It is a reminder that how a state pursues them, the sequencing, the cost to ratepayers, and the pace of building replacement capacity, determines whether the policy delivers or stalls.

IOWA: WHEN POLICY PLANTS A SEED AND ECONOMICS GROWS IT

The approach: a modest early standard, then let the economics work. Iowa’s path began with policy, but a light-touch version of it. In 1983, Iowa became the first state in the country to adopt a renewable portfolio standard, signed by Republican Governor Terry Branstad, requiring its two major investor-owned utilities, MidAmerican Energy and Alliant Energy, to obtain 105 megawatts from renewable sources. The mandate was small and carried no aggressive deadline; for its first decade utilities largely ignored it. What turned that seed into the nation’s leading wind fleet came later and was primarily economic: the federal Production Tax Credit (authored in 1992 by Iowa Senator Chuck Grassley), Iowa’s own state production tax credit and property- and sales-tax exemptions for wind equipment, and, above all, a genuinely abundant wind resource that made wind an increasingly cheap choice as turbine technology improved. Iowa let wind grow at the pace the economics allowed, rather than legislating a rapid, dated transition.

The observed results. Iowa now draws more of its electricity from wind than any other state, 63% in 2024 according to the EIA, while paying among the lowest rates in the country. Between May 2024 and May 2025, the average U.S. residential rate rose about 6.5%, yet Iowa’s edged down slightly, one of only five states where rates fell. More telling than the small dip is the level: at roughly 14 cents per kilowatt-hour, Iowa’s rates sit well below the national average, even as demand from data centers and other large users climbs. That advantage is not guaranteed to last, the recent scaling back of federal wind and solar tax credits could raise costs for a state that leans heavily on both, but the pattern to date is real.

How the policy worked. Two features stand out. First, Iowa played to its geography: because the wind resource was genuinely abundant, wind became the economical choice rather than an expensive obligation, which held costs down as the buildout scaled. Second, rather than retire its coal and gas plants before replacement power was ready, Iowa added wind on top of dependable generation it could still call on, a portfolio approach that protected reliability instead of betting everything on one source. The benefits also landed locally. MidAmerican Energy, Iowa’s largest utility (owned by Warren Buffett’s Berkshire Hathaway) and one of the two utilities the 1983 standard first applied to, paid about $45.7 million in lease payments to more than 4,000 landowners in 2025 and roughly $60 million in property taxes across 35 counties, money that funds local schools, roads, and emergency services. Today it operates more wind capacity than any other investor-owned utility in the country.

The complication: consent is still local. None of this means every Iowan welcomes wind, and the state’s experience is a reminder that even a broadly successful strategy depends on community consent, one county at a time. Some counties have moved to restrict turbines: Henry County overhauled its ordinance in 2025 with steep setbacks while keeping a moratorium in place, and Washington County advanced its own restrictions, amid resident concerns over noise, property values, and the landscape. Others went the other way; in May 2025 the Dickinson County board rejected a proposed moratorium even as some residents pressed for one, and in December 2025 MidAmerican dropped a proposed Woodbury County project.

WHAT THESE TWO STATES TEACH US

• Start with the portfolio. The right mix is the one a state’s geography and resources actually support. Fact-based energy policy begins with an honest inventory of what a state has.
• Enable new production, don’t just restrict old sources. With demand rising, the test of good policy is whether it is bringing enough new, reliable power online, not only how fast it retires existing plants.
• Keep dispatchable backup until replacements are proven. Reliability suffers when firm generation is retired before replacement capacity is ready.

Energy policy is not made in one place. It is made continuously in legislative chambers, regulatory hearing rooms, county planning offices, and local zoning boards, by officials who are accountable to the public. The gap between the energy outcomes communities want and the ones they get is often a civic-participation gap, not a legal one.

The goal worth organizing around is the same one this Brief opened with: an energy system that is reliable, resilient, affordable, and clean, all four at once. None of these is optional, and none comes for free. Meeting rising demand reliably and affordably means building enough new generation and grid capacity, drawn from the mix of sources a state’s geography actually supports. Doing so as responsible stewards of air, water, and land means making room for innovation in cleaner and renewable energy, alongside the dependable sources that keep the lights on today. These goals pull against one another at the margins, that is the central challenge of energy policy, but the task is not to sacrifice one for another. It is to advance all four together. As demand climbs from electric vehicles, new manufacturing, and data centers, the job for communities and policymakers alike is to ensure new development serves every one of these goals, while protecting ratepayers and holding developers to their commitments.

The most valuable thing any resident can bring to that effort is good information rather than a fixed position. Someone who understands the real tradeoffs, and helps others understand them, does more to advance a reliable, resilient, affordable, and clean energy supply than the loudest voice in the room. The four impact areas below are ordered to help you start where it is easiest, getting informed and informing others, and build toward greater influence over time.

DRIVE AWARENESS AND EDUCATION

Much of the friction around energy infrastructure comes from a lack of clear, nonpartisan information, and that friction is often what stalls productive conversations and positive progress. Helping your community have a fact-based conversation, one that takes the real tradeoffs seriously rather than assuming every objection is misinformation, is where most people can make the biggest difference.

1. Host a Policy Circle discussion on energy using this Brief as the foundation. Invite a local official, a utility representative, and informed neighbors, and structure the conversation around the Citizen’s Guide questions. Launch a Circle and get support from The Policy Circle for facilitation resources.
2. Share this Brief with legislators, business association, and chamber of commerce, many of whom are making infrastructure and economic-development decisions without balanced information.
3. Write a letter to the editor or an op-ed connecting your state’s energy choices to what residents pay. The Policy Circle website has a step-by-step guide for placing an op-ed effectively.

IMPACT LEGISLATION

Lawmakers are writing energy legislation right now, often without a full picture of how it will affect growth, reliability, cost, and the environment. Your role as a constituent is to help them see that full picture.

Know what legislation is active in your state. The National Conference of State Legislatures tracks energy and technology bills by state.

Identify your state legislators and their committee assignments, and request a meeting with anyone serving on an energy, environment, or commerce committee. Your state legislator’s website will list their committee assignments.

Bring the right questions:

• On growth: Is the state approving enough new generation and transmission to meet rising demand from data centers, electrification, and new manufacturing? What is slowing new projects down, and is permitting a bottleneck?
• On reliability: Are dispatchable, always-available sources being kept online until proven replacements are in place? Has the state stress-tested its grid against extreme heat, cold, and demand spikes?
• On cost: Who bears the cost of grid upgrades for large new customers, and does the state ensure those customers pay their own way rather than shifting costs onto households? Has the state independently analyzed the impact of its energy targets on rates, and what protects low-income households from increases?
• On environment: How does the state energy strategy encourage innovation in clean and renewable energy production?

Engage on permitting reform, one of the few genuinely bipartisan energy issues. Ask your legislators where they stand on streamlining state-level environmental and siting review, and whether reforms balance speed with genuine community input. Permitting is where energy goals either become real projects or stall indefinitely.

Submit concise, factual testimony when an energy bill is in committee. A personal constituent story connecting rising rates to specific policy choices, for example, carries more weight than a form-letter campaign.

REACH A POSITION OF INFLUENCE

The most consequential energy conversations happen at the local level, in the bodies that decide whether infrastructure gets built at all. Because so much new generation and transmission lives or dies at this stage, getting a seat at that table before a specific project arrives is far more powerful than showing up after a decision is made.

Apply for The Policy Circle’s Civic Leadership Engagement Roadmap (CLER) Program to join a cohort of like-minded women learning better skills to be effective civic leaders in their communities.

Find your local planning and zoning commission, and consider becoming a member. Every county and municipality has one. To find your local planning commission, search your local government website or reach out to your local municipal officials. Terms are typically several years and require no technical background – only genuine civic interest and a willingness to engage.

Identify who is already in the room. When an energy project proposal arrives in your community, developers will have already been speaking with local officials, utilities, and economic development agencies for months. Find out who is representing the community’s interests, what they know, and where the gaps are. Your county’s economic development office, planning department, and elected supervisors are the starting points.

STRENGTHEN COMMUNITIES

Energy projects that treat a community as a partner rather than a host produce measurably different outcomes than those that simply arrive, extract, and depart.

Connect energy workforce opportunities to local education pipelines. Connect local community colleges and career-technical programs to energy and infrastructure employers, so the workforce, and the jobs, can come from your own community.

Ensure low-income households have a voice and know their resources. The LIHEAP program and your state consumer advocate are tools for protecting those most exposed to rising rates.

Build the long-term relationship, not the one-time response. The advocates who shape outcomes are those who engage consistently and become trusted, informed voices before any specific controversy arrives.

• EIA State Energy Profiles — generation mix, rates, and data for your state
• NARUC State Regulatory Commissions — find your PUC and its proceedings
• DSIRE — all state and federal energy incentives
• NASEO State Energy Offices — your state’s energy planning office
• LIHEAP Energy Assistance — federal energy assistance for low-income households