Budgets – not utility bills – should be how we fund critical clean energy programs

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Lawmakers everywhere are under pressure to address soaring energy bills. Unfortunately, some of them are looking in the wrong place for solutions.

Take a recent example in Massachusetts.

Last month, members of the Bay State’s House of Representatives approved an energy affordability bill that could make it easier to deploy solar PV systems and EV chargers and included protections for electricity consumers. So far, so good.

But according to Canary Media’s Sarah Shemkus, “It could also pull the rug out from underneath the state’s nation-leading energy-efficiency programming.”

“What has drawn the most attention,” she writes, “is its proposal to cut $1 billion from the energy-efficiency program Mass Save through 2027 in an attempt to lower the fees customers pay to fund it.”

The fees for these kinds of programs are a conspicuous target for lawmakers looking to lower bills. But if the goal is to save households money, it makes no sense to slash funding for programs whose goal is to save energy and reduce customer bills.

Maggie Molina, the executive director of the non-profit Northeast Energy Efficiency Partnerships, agrees.

“Blaming energy efficiency for rising energy prices is a myth that is unfortunately gaining traction,” she wrote last week. “It’s a convenient narrative, but the data simply doesn’t support it. The real drivers of rising prices are far more complex.”

Lawmakers should remove these fees from utility bills, but not as a gimmick to reduce customer bills. Instead, the fees – and the programs funded by them – should be moved to government budgets so all taxpayers chip in for them based on their ability to pay.

Moving levies off energy bills in the UK

I’ve written here at Quitting Carbon previously that some governments, notably Denmark and Germany, have already moved in this direction.

We will need cheap, abundant, carbon-free electricity to quit carbon for good. Governments should accelerate this transition by making every effort to reduce energy bills.

At BusinessGreen, Editor-in-Chief James Murray wrote last week about a new report from the MCS Foundation finding that UK households could save up to £530 ($712) a year if the government moved an assortment of levies imposed on energy bills into general taxation and the federal budget.

“The system of green levies sees a number of clean energy, grid, and social programmes funded through levies on electricity bills,” writes Murray.

“At last autumn's Budget,” he adds, “the government announced reforms to the green levy regime, scrapping the Energy Company Obligation scheme and moving some of the costs from the legacy Renewables Obligation scheme into general taxation, delivering savings of around £150 a year for the average household.”

Utility bills vs the budget in the UK and California

In this case, the UK’s Labour government did the right thing – and then immediately began to have second thoughts. Why? Fear that voters would balk at the additional spending in the annual budget.

Let’s return to BusinessGreen’s Murray for the details.

“While the Treasury moved some policy costs off energy bills at last year's Autumn Budget there has been a reluctance to pursue wider reforms that could see levies either shifted onto gas bills or moved into general taxation,” he writes.

“Government insiders have warned shifting levies onto gas bills could disproportionately impact those households heavily reliant on gas,” he adds, “while moving them into general taxation would require the Treasury to secure billions of pounds of additional revenue to fund the move.”

Here in the Golden State, a similar tension is playing out in wrangling between the Legislature and the Office of Governor Gavin Newsom (D) over whether – and how – to fund the California Energy Commission’s Demand Side Grid Support Program (DSGS).

“The debate over whether to fund reductions in energy use during peak demand has been simmering ever since Assemblymember Jacqui Irwin tried, but failed, to fund the California Energy Commission’s program as part of last year’s cap-and-trade negotiations,” Politico’s Noah Baustin, Alex Nieves, and Camille von Kaenel reported last week.

“‘We are working at getting it back into the budget,’ Irwin said in a February interview. ‘We think it’s critical that DSGS gets funded,’” they added.

So, what’s the hold up? You guessed it, Newsom’s office doesn’t want the program funded by the state budget.

“It’s not looking good,” write Baustin, Nieves, and von Kaenel, “While the CEC program has strong support among lawmakers, who feel like it has flourished, Newsom wants to pass the job to the CPUC, where electricity bills, instead of the state budget, can fund it.”

A regressive system, a progressive solution

In an exit interview published on March 6, her last day as president of the California Public Utilities Commission, Alice Reynolds was asked by Politico’s Baustin: “How has it felt for you over the past year to have electricity rates be such a hot topic among politicians and the public?”

“It’s a huge challenge,” she replied. “We’re at a really difficult point in time, and I know that people are struggling with electricity bills. They are a regressive way to collect funds for a public good, but it’s the system that we have.”

It may be the system we have, but it doesn’t have to be the system we keep.

It is a regressive way to fund critical programs.

Cheap, zero-carbon electricity isn’t just essential for the clean energy transition. Electricity is essential for modern life – for refrigeration to keep food from spoiling, for cooling to keep the vulnerable safe during heatwaves, for broadband to make it possible to work, study, and connect with family and friends.

But utility bills in the U.S. are becoming far too expensive.

“Since 2022, the average overdue balance on utility bills climbed from $597 to $789 – a 32 percent increase,” according to a recent study published by The Century Foundation and Project Borrowers.

“As of June 2025,” the authors write, “we find that nearly one in twenty households – or roughly 14 million Americans – have [energy utility] debt so severe it was sent to collections or in arrears.”

With energy bills now a burden for so many, it’s time to shift more of the cost for public goods like energy efficiency upgrades and low-income customer bill assistance from ratepayers to taxpayers most able to pay by funding these programs in general budgets.

If you're a politician, would you rather risk incurring the wrath of voters once a year, for a budget many of them will never see, or every month, for a bill every household must pay?

It’s an easy decision.