New England energy costs may rise despite growing reliance on green power

New England faces a changing power mix

New England’s power system has changed sharply over 25 years, while natural gas remains the leading source of internal generation as cleaner resources and electrification expand across the region.

Electricity costs can reflect wholesale energy, transmission, distribution, fuel prices, infrastructure investment, public policy charges, and other regulated expenses that vary among states and utilities across New England.

Fossil generation remains a major source

A recent analysis calculated that fossil fuels supplied about 55% of New England’s internal electricity generation in both 2000 and 2025, despite major changes in the fuel mix.

Natural gas gained a much larger role during that period, while coal and oil generation fell sharply across all six New England states as the regional mix changed.

Natural gas reshaped regional generation

Natural gas supplied 51% of New England’s internal electricity generation in 2025, up from 15% in 2000, while coal and oil generation declined sharply across the wider region.

Lower natural gas prices, increased shale gas production, and slower electricity demand growth after the 2008 recession helped make gas-fired generation more competitive across New England’s power market.

Nuclear closures changed dependable supply

New England lost major nuclear generation as Vermont Yankee closed in 2014 and Pilgrim ended operations in 2019, reducing another firm source of electricity supply for the regional grid.

Nuclear power remains important because Millstone in Connecticut and Seabrook in New Hampshire continue providing large amounts of electricity without relying on fossil fuel combustion for regional generation.

Proposed projects move away from gas

The proposed resource pipeline has shifted strongly away from natural gas since the middle of the last decade as wind, solar, and battery projects gained a larger role.

By January 2026, proposed capacity consisted of 46% battery storage, 44% wind, and 10% solar, although individual projects can leave the queue before eventually reaching full commercial operation.

Electricity demand begins rising again

Electricity demand is expected to rise as transportation and building heating use more power, reversing years when efficiency and rooftop solar reduced demand from the regional electric grid.

Regional planners project net annual electricity use will increase about 9% between 2026 and 2035, requiring additional supply while winter demand grows faster than summer demand over time.

Cleaner projects dominate planned additions

Wind, solar, and battery projects dominate New England’s proposed generation queue, while state energy policies continue shaping the region’s changing resource mix and future transmission planning needs overall.

Variable renewable generation increases the need for resources and infrastructure that support reliability, including storage, transmission, imports, flexible generation, and demand management during changing regional system operating conditions.

Carbon allowances add operating costs

The Regional Greenhouse Gas Initiative requires covered power plants to hold allowances for carbon dioxide emissions, creating a market price that becomes part of generating costs for operators.

Participating states reduce available allowances over time under program rules, while auction proceeds support selected energy, consumer, environmental, and other public programs across participating jurisdictions each calendar year.

Allowance prices climb sharply

The June 2026 Regional Greenhouse Gas Initiative auction cleared at $35 per allowance, up from $19.63 in June 2025 and $20.05 in December 2024, reflecting higher recent prices.

Higher allowance prices raise compliance costs for covered generators, while effects on retail customers depend on wholesale prices, fuel conditions, generation patterns, and individual state utility rate structures.

Little-known fact: Six of the ten priciest U.S. electricity states are in New England, where aging grids and imported natural gas keep rates high.

Carbon pricing carries a regional estimate

A Fiscal Alliance Foundation analysis estimates that carbon pricing increased New England wholesale energy costs during 2025, although the calculated regional impact represents the organization’s own policy estimate.

Retail electricity bills include more than wholesale energy costs because customers also pay for transmission, distribution, utility programs, infrastructure, and other charges established through state regulation and tariffs.

Reliability requires a broader resource mix

New England planners expect renewable generation and storage to expand, but reliability still requires enough resources to meet demand during periods of limited wind or solar power output.

Natural gas, nuclear generation, hydroelectric power, imports, storage, and demand resources can each support reliability differently, making resource adequacy broader than annual energy production across the regional system.

The analysis proposes another policy path

The Fiscal Alliance Foundation analysis recommends allowing additional high-efficiency natural gas generation, expanding fuel infrastructure, and retaining dependable resources until replacement capacity can provide comparable reliability at scale.

The same analysis recommends comparing complete system costs, including transmission, storage, fuel infrastructure, backup capability, and grid maintenance, rather than evaluating individual technologies without considering wider system requirements.

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Consumer costs depend on the full system

New England’s electricity outlook depends on demand growth, which proposed projects reach operation, future fuel and carbon prices, transmission investment, and changing state energy policies over future years.

Wind, solar, and storage dominate proposed additions, while consumer costs will reflect the broader electricity system needed to provide energy, capacity, transmission, distribution, reliability, and other essential services.

Wondering where to find New England’s most scenic lighthouses? Explore a coastal road trip filled with ocean views and historic stops.

What do you think about New England energy costs rising despite growing reliance on green power? Share your thoughts in the comments.

This slideshow was made with AI assistance and human editing.

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