Minnesota's electricity affordability has plummeted over the past quarter-century, dropping from the 14th most affordable state in 2002 to 30th in 2026, according to a new report from the Center of the American Experiment published this week. The analysis, authored by Policy Fellow Darren Nelson, tracks electricity rates and rankings across all 50 states from 1970 through 2026 and links the state's declining affordability to the push for renewable energy that began in the early 2000s. The report argues this unaffordability has contributed to Minnesota's broader economic struggles, including weak growth and job creation.
The data shows Minnesota's overall electricity ranking deteriorated sharply between 2003 and 2026, falling 17 places from 13th to 30th among all states. Residential customers saw their ranking drop nine spots from 19th to 28th during the same period, while commercial users fell 12 places from 13th to 25th. Industrial ratepayers experienced the steepest decline, plunging 16 places from 17th to 33rd. The worst rankings came in the early 2020s: total end users hit 37th in 2021, residential reached 36th in 2020, commercial bottomed at 36th in 2021, and industrial sank to 39th in both 2021 and 2022. This contrasts sharply with the period from 1970 to 1990, when Minnesota improved its total affordability ranking by 27 places, climbing from 36th to ninth.
Actual electricity rates tell an equally stark story. Between 2003 and 2026, total rates skyrocketed 117 percent, jumping from 6.01 cents per kilowatt-hour to 13.03 cents. Residential rates climbed 112 percent from 7.65 cents to 16.25 cents, commercial rates surged 104 percent from 6.12 cents to 12.47 cents, and industrial rates exploded 124 percent from 4.36 cents to 9.75 cents. These increases far outpaced the 1983-2002 period, when rates were largely flat—total rates rose just 5 percent, commercial rates inched up 1 percent, and industrial rates actually fell 11 percent. The report notes that Minnesota's economy has grown at an average annual rate of just 1.4 percent between 2014 and 2025, ranking below 39 out of 50 states, and placed 32nd for employment growth and 42nd for growth of output per worker during that same span.
The report attributes the sharp decline in affordability to renewable energy mandates that gained momentum starting in 2001, culminating in the 2023 Clean Electricity Standard that the author describes as "essentially a wind, solar, and battery storage mandate." Nelson and his colleague John Phelan had previously projected high costs from such policies in a September 2022 research paper, and the report argues the data since 2001 validates those concerns. The analysis contends that electricity unaffordability has been a key driver of Minnesota's lagging economic performance, making the state less competitive for businesses—particularly industrial users facing rates that have more than doubled in two decades.
Looking ahead, the report calls for sweeping policy changes it says are needed to restore affordability and competitiveness. It recommends the governor, legislature, and Public Utilities Commission lift the moratorium on nuclear power in 2027 while imposing new moratoriums on banning natural gas, retiring coal plants, and expanding renewable energy. Beyond 2028, the report urges making these changes permanent, converting PUC commissioner roles to elected positions with term limits tied to rate performance, shifting from rate-of-return regulation to incentive-based regulation, and opening franchise monopoly markets to genuine competition. The bottom line: without major reforms prioritizing what the report calls "reliables" over "renewables," Minnesota's electricity costs will continue dragging down the state's economic prospects.