In New Jersey, a rate cap touched only a portion of the charges, and for some households it ended up making their bills higher than before.
When Democrat Gina Hinojosa is inaugurated as Texas governor in January, one of her first moves—she indicated to The Texas Tribune—would be to declare a high-cost emergency in the state and issue an emergency executive order to two actions: pause the gas and diesel tax and halt electricity rate increases.
Hinojosa, who links higher property taxes and electricity costs to the policies of Republican Governor Greg Abbott, has promised that if elected she would instruct the Public Utility Commission to cap the rates paid by residential customers until lawmakers enact measures ensuring that data centers and other high-demand users fund themselves.
With Texans experiencing a 3.3 percent rise in the average residential electricity price from August 2025 to August 2026—roughly in step with the national trend—the electorate evidently found her pledge appealing. Yet it remains uncertain whether Hinojosa possesses the authority to fulfill that campaign promise.
In Texas’s decentralized market, retail providers—not regulators—set electricity prices. This means Hinojosa has limited power to reduce residential bills through an executive order, and the move would not automatically lower costs. However, as Click2Houston.com notes, she could still influence prices by leveraging her sway over the state budget to push lawmakers toward her priorities, including pressuring large data centers to contribute more. Of course, this approach would do little to address the main drivers of nationwide electricity spikes: transmission and distribution charges.
Rather than imposing price controls in a free market, Hinojosa could take a page from New Jersey Gov. Mikie Sherrill, a fellow Democrat who has not substantially lowered electricity prices in her state despite signing an executive order that declared a state of emergency and froze rate increases by the utilities.
Sherrill realized that even a freeze would not erase the factors pushing higher electricity prices, such as the costs of supply and transmission that providers incur. In June, to offset the increases typically passed on to customers, she approved a budget authorization allocating $500 million for short-term relief to ratepayers. Yet in October, a CBS News report found that even after the rate freeze, utility costs in the Garden State remained high, with one resident noting her electricity bill had nearly doubled.
In July, the consulting firm E3 released a report—commissioned by Sherrill for the New Jersey Board of Public Utilities—that found state policy changes mainly affect distribution, which accounts for roughly a quarter of residents’ electricity bills, and that no single reform or modernization option could be presented as a stand-alone fix.
It isn’t only New Jersey that has attempted (and fallen short) to curb utility costs by freezing electricity rates; last July, Georgia’s Public Service Commission unanimously approved an agreement to freeze base power rates for at least three years. A year after the freeze began, the average price for residential electricity in Georgia rose by 2.3 percent. Meanwhile, in October, Virginia Democratic Governor Abigail Spanberger called for a six-year freeze on residential electricity rates as a condition for approving the proposed $67 billion merger between Dominion Energy and NextEra Energy.
Regardless of where such a policy is proposed, a rate freeze is a superficial remedy for a problem that arguably calls for less government meddling rather than more.
At least one Democratic governor has resisted using rate freezes as a temporary fix for rising energy costs. In a March appearance on CBS 2’s The Point, New York Governor Kathy Hochul was asked whether a two-year statewide moratorium or freeze on utility rates could be feasible. She quickly rejected the notion, preferring an all-encompassing approach to increase energy supply to help drive costs down.
What rate freezes like Hinojosa’s miss is that states have limited direct influence over electric prices. As the E3 report notes, most of a typical bill is set in federal and regional markets with only limited ability for states to affect those costs.
Nevertheless, that doesn’t make the underlying idea of government intervention in the market any less problematic. When price signals are dampened by freezes, utilities can’t effectively plan for upgrades, expansion, or future demand. Freezing electricity rates may look favorable in polls, but it tends to work less well in practice.
