Evergreen Explains: Biden’s Clean Electricity Standard Will Mean American Families Pay Less in Energy Bills Each Month

A federal CES will benefit American families by cutting the burden of monthly utility bills.

Evergreen Action
5 min readApr 23, 2021

President Biden’s proposed 100% Clean Electricity Standard (CES) by 2035 is more than just critical climate policy that’s poised to “catch fire” — it’s a key pillar of America’s path to economic recovery. Evergreen has already laid out how a federal CES will create millions of good paying jobs; a CES will also put money directly back in people’s pockets. A federal CES will benefit American families by cutting the burden of monthly utility bills.

After the COVID-19 pandemic left nearly one in three households behind on their utility bills and at risk of utility shut-offs, lowering costs for consumers across the country will help boost America’s economic recovery. These savings would support the most vulnerable populations, including communities of color who are currently paying higher utility bills. Solar power is already the “cheapest electricity in history” and renewable energy sources are continuing to get cheaper at a faster rate than fossil fuels. Running our grid on clean energy instead of dirty fossil fuels will save money across the entire economy.

State policies have proven that this approach can dramatically lower energy bills. For instance, Illinois’ shift to a more renewable heavy power grid saw per-kilowatt hour prices fall by 17% from 2009 to 2014. Compliance with 2013 standards alone delivered up to $1.2 billion in savings to electricity consumers across the country. A federal CES will help spread those benefits to Americans in every community.

How Switching to 100% Clean Electricity Will Cut Costs

Clean Energy’s Declining Costs Mean An Ambitious Clean Energy Standard Will Reduce Electricity Prices. A model from the University of California Berkeley Goldman School of Public Policy indicates that wholesale electricity costs would be lower in 2035 with a 90% clean energy mix than they are today. The researchers state that “[l]ower wholesale costs would translate into lower retail electricity prices, assuming electricity distribution costs do not change significantly.” Solar power is already the “cheapest electricity in history” and wind is cheaper than coal in many markets; as clean power makes gains on the grid, those savings will be passed along to the consumer.

Reducing Utility Bills Will Provide Relief To Low-Income, Black, and Hispanic Households. A study by the American Council for an Energy-Efficient Economy found that “low-income, Black, Hispanic, renter, and older adult households have disproportionately higher energy burdens than the average household.” A CES and complementary policies can lower household energy burdens, delivering substantial financial relief for many of the most vulnerable communities.

Renewables Are Getting Cheaper Faster than Expected — Putting Older Studies on the Clean Energy Transition and Cost Out of Date. The UC Berkeley 2035 report’s “findings contrast sharply with the findings of studies completed more than 5 years ago, which show future electricity bills rising compared to today’s bills. For example, NREL’s Renewable Electricity Futures Study, published in 2012, projected retail electricity price increases of about 40%–70% above 2010 prices, for a system with 90% renewable electricity penetration in 2050 (NREL 2012). Renewable energy and battery costs have declined much faster than these older studies assumed, which is the main reason their cost results differ so much from ours.”

Complementary Policies Supporting The CES Can Further Lower Utility Bills And Offset Any Price Increases. Evergreen Action has called for the CES to be implemented alongside a suite of complementary policies, including utility bill support and policies that drive energy efficiency. Federal support through the Low Income Home Energy Assistance Program (LIHEAP) and Weatherization Assistance Program (WAP) have generated massive, measurable benefits for the low-income households most vulnerable to higher utility bills; expanding those programs would provide further support to those burdened by energy costs.

Proven Savings — Americans in States with Energy Standards See Big Reductions in Utility Bill Costs

Nationwide, State-Level Standards Have Generated Dramatic Savings For Energy Consumers. Over 30 states and territories have enacted energy standards to reduce reliance on fossil fuels. They have relied on two different approaches to energy standards which inform President Biden’s CES: Renewable portfolio standards that mandate a set ratio of renewable energy production for utilities by a set date, and clean energy standards that mandate 100% zero-carbon emission energy production by a set date, with intermediate targets. States have implemented both approaches to great success. A 2016 report from the Berkeley Lab estimated that “[r]enewable generation used to meet 2013 RPS compliance obligations potentially shifted the supply curve for electric power,” reducing wholesale prices and yielding up to $1.2 billion in savings to electricity consumers across the country.

  • Illinois ratepayers paid less for their electricity as the state’s renewable portfolio standard advanced. In 2007, Illinois established a renewable portfolio standard requiring that utilities’ energy mix reach at least 25% renewable by 2025. The Illinois Power Authority has monitored the RPS’s impact on electricity prices and found that utility bills declined as the share of renewables on the grid increased: for residential buyers, per-kilowatt hour prices fell by 17% from 2009 to 2014. For larger consumers, those electricity prices dropped by nearly 24%.
  • Massachusetts’ renewable portfolio standard substantially reduced utility bills. A 2011 report from the Massachusetts Executive Office of Housing and Economic Development found that the state’s modest 10%-by-2015 standard would generate $328 million in benefits, amounting to a consumer savings of $.006 per kilowatt hour — a substantial cut considering that, over the course of a year, the average household consumes more than 10,000 kilowatt hours of electricity.
  • Ohio increased the share of renewable energy on their grid, directly leading to cuts in wholesale electricity prices, before Republican state lawmakers gutted the state’s successful programs. A report from the Ohio Public Utilities Commission examined price suppression, “a widely recognized phenomenon by which renewable resources produce lower wholesale market clearing prices.” Their modeling found that existing renewable energy generation had cut prices by .15%, and developing all permitted projects complying with the state’s renewable portfolio standard would directly reduce wholesale prices by .51%. The RPS’s impact would amount to a wholesale price reduction of $.005 — $.017 per kilowatt hour.