Exclusives

EXCLUSIVE: Local Green Energy Mandates Drive More Than Half Of Renewable Costs In New Jersey, Pennsylvania And DC

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Rules forcing utilities to buy energy credits from in-state producers account for more than half the cost of energy mandates in three East Coast jurisdictions.

The requirements made up 51 percent of New Jersey’s mandate costs, 52 percent of Pennsylvania’s and about 57 percent of Washington, D.C.’s in the latest reporting years, according to a report from Always On Energy Research shared exclusively with the Daily Caller News Foundation.

“It would be difficult to conceive of a more punitive and expensive policy for electricity,” Isaac Orr, the group’s vice president of research and a co-author of the report, told the DCNF. “The way that it’s been executed has been incredibly inflationary for electricity prices.”

Utilities buy the credits to comply with the mandates, but “it all gets passed through to customers,” Orr said.

Each credit represents one megawatt-hour of electricity from a qualifying source, and utilities meet the mandates by buying and retiring enough credits to cover a set share of their sales, Orr explained.

The mandates added nearly $775 per electricity customer in Washington, D.C., about $298 in New Jersey and $227 in Maryland in the latest years analyzed, the report found.

Democratic D.C. Mayor Muriel Bowser’s office said in a statement to the DCNF that it did not “have anything to add,” and the Justice Department declined to comment.

The Maryland Public Service Commission said in a statement to the DCNF that it had not had the opportunity to review the report and “would refrain from making any speculative comments.”

The New Jersey Board of Public Utilities and the Pennsylvania Public Utility Commission did not immediately provide a comment on the record. The offices of Democratic D.C. Council Chairman Phil Mendelson and Republican West Virginia Attorney General JB McCuskey and the Massachusetts Department of Energy Resources did not immediately respond to requests for comment.

The nation’s capital passed a law in 2019 requiring all of its electricity to come from renewable sources by 2032, and later changes required power providers to get 15 percent of their sales from local solar by 2041, according to the report.

Bowser, who signed the mandates into law, wrote to the D.C. Council in June that the local solar requirement adds $20 a month to every residential electricity bill, the report noted.

That cost will climb to $40 a month by 2029 if the rules are left unchanged, the report estimated.

The D.C. Council exempted the city government’s own buildings from paying the mandate’s costs, while homes, businesses and federal buildings still pay them, according to the report.

The city’s local solar credits made up only about 7.5 percent of the credits it retired in 2025, the report found.

Those solar credits cost $407.24 per megawatt-hour in 2025, more than 16 times the $24.72 price of other renewable credits, the report noted.

Compliance costs in the nation’s capital climbed from $65 million in 2020 to nearly $272 million in 2025, according to D.C. Public Service Commission figures cited in the report.

Most of the city’s electricity goes to commercial customers, Orr noted, adding that it is “probably better to save them almost $800 a year than to charge that for … vanity in-state solar.”

Rooftop solar systems are “two to three times more expensive” than large utility-scale projects, and nearly all of the land in the city that could be developed already is, Orr said.

Energy Secretary Chris Wright wrote in a Sept. 28 X post that states with renewable portfolio standards, the mandates the report examines, pay 45 percent more for electricity than states without them.

An Energy Department spokesperson said in a statement to the DCNF that “policies that increase compliance costs, restrict the pool of eligible resources, or contribute to the premature retirement of reliable generation can carry real consequences for ratepayers and grid reliability.”

“The Department will continue to use its federal authorities to protect affordability and reliability and ensure Americans have access to the dependable energy our economy requires,” the spokesperson said.

In Pennsylvania, costs for Tier II credits, which come from sources such as waste coal and large hydroelectric dams, rose from $3.6 million in 2020 to more than $367 million in 2025 after a 2020 law limited the credits to in-state producers, the report found.

About 40 percent of the state’s Tier II credits came from out-of-state generators in 2020, but all of them came from in-state sources by 2025, the report noted.

Joshua Schubert, an energy policy analyst at the Commonwealth Foundation, a free-market think tank in Pennsylvania, said in a statement to the DCNF that the state’s waste coal plants “received just over half of the $367 million in Tier II credits mandated by AEPS [the Alternative Energy Portfolio Standard] in 2025.”

The waste coal industry’s trade group told lawmakers in 2019 and 2020 that closing Tier II to out-of-state sources would make credit prices “rise substantially,” Schubert said.

“Pennsylvania’s power suppliers should earn their revenue competitively, not through costly state mandates,” he said.

Overall spending to comply with the state’s alternative energy mandate grew from $122.5 million in 2020 to $701.9 million in 2025 and has totaled $3.3 billion since the program began, according to the report.

Pennsylvania’s utility commission projected a “likely shortfall” of Tier II credits beginning in 2028 in its latest annual report, in which the state Department of Environmental Protection recommended that the General Assembly reassess the 2020 law, saying the issue could be addressed by changing the geographic qualifications for the credits.

West Virginia Attorney General JB McCuskey sued the commission and its chairman and vice chair in federal court in September, arguing that the in-state requirements violate the Constitution’s Commerce Clause by favoring in-state producers over out-of-state businesses.

The rules shut at least 10 power producers from his state out of Pennsylvania’s credit market, the Altoona Mirror reported, citing the lawsuit.

West Virginia generators lost the chance to earn more than $25 million in credit revenue in 2025, and the state projects more than $895 million in lost revenue over the next decade, according to the report’s summary of the complaint.

Orr said the case “has a pretty good opportunity” to set a precedent, though he noted that he is “not a legal scholar.”

New Jersey’s mandate compliance costs rose 88 percent from 2019 to $1.27 billion in the 2024 energy year, and the in-state solar requirement accounted for $653 million of that total, according to state utility board documents cited in the report.

Orr likened in-state solar rules in New Jersey and Massachusetts to Wisconsin requiring that bananas served in school cafeterias come from greenhouses in the state, which he called “a particularly poor place to grow bananas.”

The states are “mandating a resource that is not optimal for the region,” he added.

“It’s exceedingly difficult to build things in blue states,” Orr said.

He pointed to prevailing wage requirements, project labor agreements, high taxes and other regulations, saying that in-state mandates layered on top of that business climate are “a recipe for higher prices.”

Maryland’s solar carve-out, the portion of its mandate that must be met with solar credits, cost $188 million in 2024, or 30 percent of compliance costs, while covering about 17 percent of the required credits, the report found.

In-state solar facilities produced only enough electricity to meet 80 percent of the carve-out that year, so suppliers paid $37 million in fees for falling short, according to the report.

The state is lowering that fee from $60 per megawatt-hour in 2024 to $22.50 by 2030, the report showed.

Setting the fee below the price of credits makes noncompliance “legal for a price,” Orr said, though he called that approach “not a bad strategy” for keeping costs contained.

The best policy would be to “get rid of the mandates entirely,” he said, adding that lawmakers who “can’t do that” should “at least allow out-of-state credits to satisfy the mandates.”

In Massachusetts, two state solar credit programs cost an estimated $5.65 billion from 2011 through 2023, the report found.

Using solar credits from Texas, which sell for $2.30 per megawatt-hour, would have cut that cost to $42 million, according to the report.

Renewable and clean energy mandates cost the state’s customers about $18 a month on average from 2007 through 2025, the report estimated.