How Obama is Increasing Your Electric Bill
Obama's Legacy: Endangerment and Unaffordable Energy
“Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” - President Obama, San Francisco Chronicle Interview 2008
Affordability has been the soup de jour of our national electricity discourse for the last several months, as power prices continue their relentless six-year climb upwards and liberal politicians seek to seize the growing discontent over ballooning bills to boost their electoral fortunes in the 2026 midterms.
Against this backdrop, Environmental Protection Agency (EPA) Administrator Lee Zeldin announced last week that the agency has ended the Endangerment Finding, the legal foundation for most federal climate regulations, for greenhouse gas emissions from mobile sources, hailing it as the single largest deregulatory action in U.S. history.
While last week’s rulemaking applies only to cars, trucks, and other mobile sources of greenhouse gas emissions, it is widely believed that these rules telegraph future rulemakings that will rescind the Endangerment Finding for stationary sources. Chief among these stationary sources are the nation’s coal and natural-gas-fired power plants.
Rather than rehash the mechanics of the repeal, speculate about potential court challenges, or discuss the policy implications moving forward, we wanted to meander down memory lane to demonstrate the impact of the Endangerment Finding and the subsequent regulations promulgated from it on electricity prices today.
The Endangerment Finding Increased Electricity Prices
Needless to say, not everyone was pleased with the Endangerment Finding’s extinction. Former President Barack Obama took to Twitter to admonish the current administration over its actions, claiming that the nation would be less safe, less healthy, and less able to fight climate change without it.
Notably absent from this list is any mention of the impact of the Endangerment Finding—and its subsequent role as the basis of his Clean Power Plan— on electricity prices. The omission is astute, indicating that the former President is savvy enough to understand that his policies were designed to cause pain at the plug. Rising prices were a feature, not a bug.
For example, in 2008, Obama candidly admitted that his desired cap-and-trade system for greenhouse gases would cause electricity prices to “necessarily skyrocket.” He also noted:
“Because I’m capping greenhouse gases, coal power plants, natural gas [power plants], whatever the industry was, they would have to retrofit their operations, and that will cost money; they will pass that money on to consumers.”
Despite the House of Representatives passing Waxman-Markey, a Cap-and-Trade bill, and the Democrats briefly holding a 60-seat, filibuster-proof majority in the Senate in 2009, a Cap-and-Trade bill was never brought to the Senate floor, killing what was to be the basis of Obama’s climate agenda.
Skinning the Cat
Having been rebuffed in his efforts to effectively enact a carbon tax, Obama was undeterred, stating, “Cap-and-Trade was just one way of skinning the cat; it was not the only way, it was a means, not an end, and I’m going to be looking for other means to address this problem.”
The result was a novel reinterpretation of the Clean Air Act under Sections 111(b) and 111(d) that the administration argued allowed it to regulate greenhouse gas emissions from new and existing power plants under the New Source Performance Standards (NSPS) and the Clean Power Plan (CPP), respectively.
The most consequential outcome from the NSPS was the emissions standards established for new coal-fired power plants in 2015. The emissions limit was set so low that anyone seeking to build a new coal plant would be required to install unproven carbon capture and sequestration (CCS) technology. As a result, there has not been a new coal plant built in the United States since the 932-megawatt (MW) Sandy Creek Station came online in 2013.
With new coal plants effectively outlawed, the Obama administration turned its attention to the existing fleet, issuing the Clean Power Plan to limit carbon dioxide emissions from the power sector by establishing greenhouse gas emissions limits for each state.
State-based emissions reduction mandates were to act as a stick looming over the heads of utility resource planners and utility commissioners, “encouraging” them to retire their coal plants, rather than spend millions of dollars retrofitting them to comply with other increasingly onerous standards for coal plants, including the Mercury and Air Toxics Standards (MATS), Coal Combustion and Residuals (CCR), Effluent Limitations Guidelines (ELG), and Cross State Air Pollution Rules (CSAPR).
Fortunately for the entire industry, the U.S. Supreme Court granted an emergency stay of the final Clean Power Plan rules after states and industry challengers argued EPA had exceeded its authority and that compliance would cause irreparable harm. Later, the first Trump administration repealed and replaced the rule with the Affordable Clean Energy Rule.
Despite the death of the Clean Power Plan, the regulation’s promulgation has had a profound influence on the electricity sector for the last 10 years.
The Chilling Effect
Climate advocates and wind and solar proponents like to have it both ways with respect to the long-term legacy of the Clean Power Plan.
On the one hand, they like to claim that the regulations played no role in influencing utility decisions to retire coal plants prematurely (and replace them with wind, solar, battery storage, of course) because they were stayed by the Supreme Court and rescinded by the first Trump administration. They argue that reductions in natural gas, wind, and solar prices did the heavy lifting of killing coal plants, and the EPA’s role was illusory.
On the other hand, they want to take credit for the fact that their reinterpretation of the Clean Air Act and issuance of the Clean Power Plan established the expectation that future regulations and policies would require utilities to reduce their greenhouse gas emissions, which contributed to companies including carbon costs or anticipated regulations in their Integrated Resource Plans (IRPs) and issuing voluntary pledges to achieve Net Zero emissions.
The latter was the perspective given by Jody Freeman on Heatmap’s Shift Key podcast. Freeman is the Archibald Cox Professor of Law at Harvard Law School and the Director of the Energy and Environmental Law Program. She was also the Counselor for Energy and Climate Change in the Obama White House from 2009 to 2010, and was the architect of President Barack Obama’s agreement with the U.S. Auto industry to double fuel economy standards and to regulate greenhouse gases under the Clean Air Act.
On the show, Freeman argues that the Obama administration’s interpretation of the Clean Air Act was instrumental in implementing climate policy via regulations:
But the point of all this is to say you can make an argument. Well, look, this act hasn’t panned out. Right. We never got these power plant standards anyway. I would just disagree with this.
…Even the so-called failed Clean Power plan, that process helped to spur a decarbonization conversation among utilities and in the states that helped them plan for the future, and was really consistent with the market going in the direction of cheaper renewable energy, solar, wind, et cetera. So I still think the process around the clean power plan was really productive and helpful.
Freeman is correct. The Clean Power Plan, underpinned by the Endangerment Finding, was an effective lever because it introduced climate risk to the utility planning process. The utility industry operates on decade-long planning cycles, which means the introduction of this climate uncertainty introduced 11 years ago is still impacting power prices today.
Some states have adopted carbon taxes or regional cap-and-trade programs to reduce emissions and thus exposure to the risk that climate policy could leave coal and gas plants as stranded assets, while other states, like Minnesota and Colorado, adopted state-specific Social Cost of Carbon (SCC) metrics for resource planning.
In many other states, even those that are traditionally “redder,” like Louisiana or Arizona, utility companies like Entergy and Arizona Public Service incorporated a cost of carbon dioxide emissions in at least some of their planning scenarios, stacking the deck in favor of wind, solar, and natural gas buildouts.
On top of that, virtually every Investor-Owned Utility adopted self-imposed Net Zero goals to enrich shareholders reduce emissions.
The Obama Influence, Today: Unnecessarily Skyrocketed
The Endangerment Finding was the first step in a regulatory road that has ultimately led to a widening chasm between climate-centric states, which vote overwhelmingly for Democrats, and cost-centric states, which predominantly vote for Republicans.
As a rule, the states that have been the most aggressive in enacting climate policies—like carbon pricing, wind and solar mandates, and rejecting pipelines—have the highest electricity costs, which we were able to demonstrate in our map from the Blue States, High Rates report, which Always On Energy Research partnered on with the Institute for Energy Research.
In fact, it is often easier to explain why some Blue states are the exceptions to the rule, with electricity rates below the national average, than it is to argue that Blue-state policies don’t drive up prices.
Some states, like Washington and Oregon, have costs below the national average despite their best efforts to change that, thanks to bountiful hydroelectric power that reflects the “greenness” of the original New Deal.
New Mexico’s electricity costs are low thanks to the oil and gas industry, which delivered the nation's lowest delivered-cost of natural gas in 2024 ($0.99 per million British thermal units). In addition, a surge in load growth to power the oil and gas industry has more than doubled the industrial electricity consumption in the state since 2008, spreading fixed capital costs over more MWhs, thus reducing rates.
Minnesota and Colorado are currently below the national average, as well, but that is largely because they started far below it. Their cost advantage has eroded dramatically after enacting wind and solar mandates in 2007.
The growing rift in state energy policies is causing a predictable dynamic where the delta in costs between red states and blue states is widening over time.
Sarah Montalbano made the chart below, which shows the increase in residential electricity rates for Blue states, Purple States, and Red states from January 2019 through November 2025. Blue state price increases are nearly twice the Red state average during this time.
Conclusion
Obama’s legacy is one of electricity prices “necessarily skyrocketing” for those states that have most aggressively followed his example and have sought to reduce their carbon footprint.
The end of the Endangerment Finding, should it hold up in court, will only accelerate the divergence in policies and prices between the Blue states and Red states. In this scenario, the threat of federal greenhouse gas regulations will be greatly diminished, and it should hold far less sway over decisions to retire coal plants or build wind and solar facilities to hedge against the risk of future climate policies.
In other words, if you like your power plant, you’ll be able to keep it.
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Great post, Boys.
It would be a real shame if you were to make Gavin Newsom wear the data/reality of what his energy/environmental policies have rendered in CA like a Scarlet Letter for the next 33 months.
Whatever you guys do, please don't do that....
;)
My thoughts are that coal became uncompetitive against gas because of the cost burden of regulations. In a vacuum where no alternative fuel was available, the price would have simply increased. Regardless the intent of the Biden era rules were to completely eliminate combustion as a power source, simply building on the endangerment finding foundation.