The race for affordable power

Everyone in the country is affected by energy rates. Whether you are a homeowner, renting a duplex or staying in a studio apartment, you will feel the consequences of expensive power.

This is why effective public policy should aim to provide consistent and affordable energy to power our lives.

So which state has the right approach? Electricity prices vary across our region due to numerous reasons. States such as Idaho enjoy geographical advantages, while others like Washington intentionally enact damaging climate energy policies that drive prices up for consumers.

The most recent data from the Federal Energy Regulatory Commission shows that Washington costs 13.67 cents per kilowatt hour, Idaho 11.88 cents per kilowatt, Wyoming 13.89 cents, and Montana 12.9 cents.

Washington has the second-most-expensive rates at 13.67 cents per KWh, but even that ranking is misleading. The Evergreen State has a tremendous advantage with the amount of hydroelectric power available. About 60% of its grid is powered by hydro. Its costs appear competitive in comparison to other states, but without the hydro advantage, it would be dead last.

Washington has the Columbia and Snake rivers with dams that generate power for the state. Hydroelectric power provides its users with affordable and reliable baseload power. This could be at risk, though, after a federal judge in Oregon recently ordered that the Columbia and Snake River dams generate less electricity in efforts for salmon mitigation.  

Washington lawmakers have also acted to undermine the reliability of low-cost energy. In 2019, the Clean Energy Transformation Act was passed to phase out coal-generated energy by 2025. In 2021, a carbon cap-and-trade market system was passed through the Climate Commitment Act. Over time, this policy has heavily regulated the industry and incentivized more expensive and less reliable energy forms. Just ten years ago, in October of 2015, Washington state was beating its neighbors in affordable energy. Now its policies are increasing prices for consumers. 

Costs from the Climate Commitment Act were deferred for the first couple of years of implementation, but now companies such as Puget Sound Energy have begun their next electric rate plans, and the cost will be added to consumer bills to cover compliance costs incurred in 2023, 2024, and part of 2025.

Puget Sound recently announced, “Beginning, Aug. 1, 2025, electric customers will see higher rates to cover the cost of allowances PSE needs to purchase to comply with the Climate Commitment Act and cover emissions from electric generation under the law.”

Puget Sound also asked the Washington Utilities and Transportation Committee to approve its plan to increase electric bill rates by nearly 30% and gas bills by nearly 20% by 2029 for residential rate payers. 

Idaho leads the region with the most affordable residential energy rates at 11.88 cents per kWh. Like Washington, it benefits from hydroelectric energy. But unlike Washington, it doesn’t meddle with the particular energy sources that utility companies seek to provide their customers. Energy rates for Idaho residents have increased slightly due to a population boom starting in 2020. Overall, Idaho is doing all of the right things.

 Wyoming has a slightly higher cost compared to the rest of the states in our region at 13.89 cents per kWh, but most of this can purely be attributed to its lack of access to hydroelectric power. It has also embraced nuclear energy, as Terrapower has broken ground and just been approved by the Nuclear Regulatory Commission to construct a plant in Kemmerer. In the larger picture of the U.S, Wyoming performs quite well, but it can be overshadowed by its neighbors who have a massive geographical advantage in the form of hydropower.

Montana’s performance is similar to Idaho’s at 12.9 kWh. Its energy generation is from natural gas, coal, hydro and minimal renewables. Its energy policy has stayed hands off, allowing utility companies to do what’s best for their business and the customer. It hasn’t adopted a carbon cap and trade program and hasn’t enacted a renewable portfolio standard. The Montana Public Service Commission ensures that utility companies can only recover costs that are reasonable and prudent from real expenses. Energy providers in Montana cannot penalize customers for failed investments or speculative projects.

Despite a massive hydroelectric advantage, Washington will continue to become more expensive due to its energy tax and regulatory policies, while Idaho, Montana and Wyoming are likely to see the cost curve bend with their support for bringing more nuclear power online.

Sam Cardwell is a Policy Analyst for the Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming.