Electric Power Markets and State Policy: Changing Dynamics amid Federal Policy Uncertainty
Major shifts in federal energy policy under the Trump administration alongside technological and policy changes underway across electricity markets and states raise important questions about the future of US energy policy, at federal and state levels.
Key findings
- The electric power sector is facing a set of trends related to electricity demand as well as technology- and policy- driven shifts toward low-carbon generation that are occurring regardless of federal policy.
- These broad trends have led to market dynamics—such as falling wholesale electricity prices and increasing shares of natural gas and renewable resources— that pose challenges to current electricity markets, including incumbent coal and nuclear power plant
- States, utilities, and regulatory bodies have developed a range of approaches to address these challenges and also are continuing to pursue their own priorities regarding climate and clean energy technology policy.
- Better aligning market incentives and state policy priorities can improve efficiency in US electricity markets and help achieve policy goals cost-effectively.
