Energy Efficiency Takes Backseat as States Tackle Affordability

Some Democratic-led states are looking to cap or cut energy efficiency funding as policymakers aim to reduce consumers’ electricity bills in the short term, worrying advocates who say efficiency improvements lower bills over the long run.

Maryland, Rhode Island, and Massachusetts have all taken steps to cap or reduce funding for energy efficiency programs, which typically aim to help residents make home improvements to drive down their energy usage, theoretically reducing their utility bills.

Curbing energy efficiency funding in favor of affordability is a marked change for Democratic-led states. They have predominantly led the climate fight at the state level by implementing an array of policies and targets focused on reducing pollution, among other things.

The proposals to pump the brakes on efficiency work indicate how widespread and politically important the issue of electricity affordability has become—especially given the Trump administration’s moves to quash support for initiatives to fight climate change, which has put more onus on climate-minded states and localities to act.

The cocktail of pressures states are facing is in some ways a confluence of bad timing, energy efficiency advocates acknowledge.

It’s a midterm election year, heating bills tend to rise in the first quarter due to heating costs, the federal government is pulling back on clean energy support, there’s a war in Iran, and a tough economic environment in the US, said Rebecca Foster, CEO of VEIC, a nonprofit that operates state-level efficiency programs.

“There are a lot of stresses to energy affordability today that are, I think, leading state policymakers to look for every solution possible,” Foster said. “Without energy efficiency funding, while it may seem like a short-term win, energy affordability will be much worse over the mid and long-term.”

Shuffling Funds

Maryland Gov. Wes Moore (D) and state lawmakers are pushing legislation to pull $100 million from the state’s Strategic Energy Investment Fund “to offset utility fees and lower energy bills,” according to a press release from Moore’s office. That fund pays for a grant program that helps low-income residents boost energy efficiency by upgrading HVAC systems or improving insulation, for example. The fund also pays for other programs focused on efficiency.

The legislation “will provide Maryland ratepayers at least $150 in annual savings while holding utilities and data centers accountable, strengthening the long-term reliability of our energy system, incentivizing new generation, and reaffirming our commitment to achieving our clean energy goals,” state House Speaker Joseline Peña-Melnyk said in a statement.

Rhyan Lake, a spokesperson for Moore, said the bill would invest "$100 million to build local clean energy generation and support the state’s energy efficiency and climate programs.”

“The Governor believes we should walk and chew gum at the same time — lowering costs for families while making record investments in clean energy and climate action,” Lake said.

Rhode Island lawmakers, meanwhile, have proposed limiting funding for a state energy efficiency program to no more than $75 million a year from direct bill charges for the next three fiscal years. The Rhode Island Public Utilities Commission approved an energy efficiency budget of roughly $117 million for 2025 and about $96 million for 2026.

State Rep. Marvin Abney (D), chair of the Rhode Island House’s finance committee who’s sponsoring the bill, and a spokesperson for Gov. Dan McKee’s (D) office didn’t respond to requests for comment. In his state of the state address in January, McKee applauded the PUC’s decision and said he “was pleased” it voted “at my request—to provide $21 million in cuts to your energy bill this year.”

In Massachusetts, lawmakers proposed a bill to curb energy efficiency funding by at least $1 billion. State Rep. Mark Cusack (D), chair of the legislature’s Joint Committee on Telecommunications, Utilities, and Energy and one of the sponsors of the bill didn’t respond to multiple requests for comment.

That follows an announcement from the state last year saying it was cutting $500 million in funding from the three-year budget for the energy efficiency program Mass Save. But Gov. Maura Healey’s (D) administration has also encouraged residents to make efficiency improvements and touted those programs as part of her affordability agenda.

“Our administration is committed to ensuring strong energy efficiency programming in Massachusetts that saves customers money, which is what the Governor’s energy affordability legislation aims to do,” Maria Hardiman, a spokesperson for the state’s Executive Office of Energy and Environmental Affairs, said in an emailed statement.

Funding One Solution Over Another

Energy efficiency proponents are expressing concern over the cuts, saying officials are focusing on short-term and not long-term relief. They also point to how much consumers have saved from efficiency programs in recent years.

“These are things that we can actually do to reduce bills, and if we don’t do them, it’s going to be even worse in the future,” said Kyle Murray, state program implementation director at Acadia Center, a nonprofit aiming to lower the Northeast’s carbon emissions by at least half by 2030.

The federal government has also considered cutting energy efficiency funding. The Trump administration has tried to gut Energy Star, a more than 30-year-old initiative known for its blue and white labels adorning products considered energy efficient. Energy Star, which is run by the Environmental Protection Agency and the Department of Energy, has saved consumers more than $500 billion, according to its website.

VEIC’s Foster said the Trump administration’s pullback on support for climate programs means state work is all the more crucial.

“With the federal programming at risk and with federal budgets for energy efficiency and clean energy resources reduced dramatically in this administration, state support is more important than ever before,” Foster said.