In the energy sector, 2025 was the year when we all realized we had outgrown our trousers. The flaws inherent in the systems that seemed to work well for decades, such as the US power grid, were finally exposed. The two big drivers for reform were the return to high growth in electricity demand after 20 years of stagnation—looking at you, Grok—and the rightsizing of many federal subsidies and regulations.
I’m proud of the work my Cato colleagues and I have done to advance free-market reforms in the energy sector. America’s energy challenges are structural and can’t be changed overnight, but we are actively breaking dysfunctional political systems and replacing them with a freedom-oriented agenda. Before we rejoin the fray, let’s celebrate the wins from 2025.
Win #1: Early Signs of Liberating Electricity
In August, New Hampshire sparked a revolution in electricity supply by passing bold legislation that exempts off-grid electricity providers from the jurisdiction of the state’s public utilities commission. Glen Lyons at Advocates for Consumer Regulated Electricity deserves much of the credit (he donates his time), and New Hampshire Representative Michael Vose spearheaded the legislative effort. The journey from original concept to enacted state law was the swiftest I’ve ever seen, and I’m grateful to everyone involved.
This win is extra sweet because it’s truly nonpartisan. The New Hampshire law brought together supporters of clean energy and free markets. Sam Evans-Brown of Clean Energy NH joined Andrew Cline of the Josiah Bartlett Center and Glen to write an op-ed about the law in the NH Journal. A Republican lawmaker in Illinois read the New Hampshire law and introduced a bill with similar language in his state, picking up three Democratic cosponsors.
In December, the energy task force of the American Legislative Exchange Council advanced a model bill that would allow Consumer Regulated Electric (CRE) Utilities in any state that adopts the bill language (“CRE” has become shorthand for off-grid utility networks). Watch this space in 2026 to see how many states choose to liberate their electricity industry in the face of growing political pressure to address concerns about reliability and affordability. At the federal level, I’ll keep pushing for CRE Utilities to be exempt from the Federal Power Act.
Win #2: Deep Reform of the Inflation Reduction Act
Repealing the 2022 Inflation Reduction Act (IRA) has been a top priority for me since I joined Cato in 2023. I wrote about how the IRA disrupts everything from transmission expansion to environmental regulations to organized wholesale markets. This year’s biggest contribution to the IRA debate, though, was the policy analysis I wrote with Joshua Loucks titled “The Budgetary Cost of the Inflation Reduction Act’s Energy Subsidies.” Published as Policy Analysis No. 992 by the Cato Institute, this work used lower and upper bounds (and 10- and 25-year budget windows) to provide a comprehensive range of estimates of the potential fiscal impact of the IRA’s energy subsidies.
Our paper focused the debate on the cost of the IRA and emphasized the need to repeal the never-ending tax credits. And on Independence Day of this year, the President signed a new budget reconciliation bill that repealed the subsidy provisions that would not have expired and significantly pared back a variety of energy subsidies. This was not a full repeal of the IRA’s energy subsidies, as my colleagues and I had called for, but it was a major win that many industry experts did not see coming.
Win #3: Hitting Reset on Climate Policy
In March, I was invited by Secretary of Energy Chris Wright to work on a climate report with a small group of scientists. Over the course of about four months, these folks (who would come to be known as the Climate Working Group) produced an exceptional report that featured a powerful foreword by Secretary Wright. In August, I wrote an article titled “Why I Helped Organize the Department of Energy’s Climate Report,” offering my personal story. If you read just one of the links in this piece, I suggest you read that article.
It was a great honor to support Secretary Wright and help shed light on the climate policy debate, which I expect will keep raging throughout the century. As Wright said on July 29 in response to the Environmental Protection Agency’s proposed rescission of the endangerment finding:
“America is returning to free and open dialogue around climate and energy policy—driving the focus back to following the data. Today’s announcement is a monumental step toward returning to commonsense policies that expand access to affordable, reliable, secure energy and improve quality of life for all Americans.”
In the spirit of free and open dialogue around climate and energy policy, I was humbled to join Representative Dan Crenshaw’s podcast to discuss the report with him and communicate to a wide audience some of the uncertainties involved in climate research. For example, many climate studies use impossible scenarios involving extremely high emissions to generate alarming modeling results. Further, the models used to estimate the social cost of carbon dioxide require big assumptions about what the global economy will look like one hundred-plus years from now.
Earlier in the year, I joined John Stossel to discuss state policies, such as the one passed in New York, that retroactively tax carbon dioxide emissions. In an era of tight state budgets, I expect more states to consider raising revenue by taxing activities that have already taken place. If I can put a positive spin on this dangerous approach, perhaps one of these state laws will be met by a principled legal challenge that successfully reinvigorates the clause in the US Constitution that says, “No State shall … pass any Bill of Attainder [or] ex post facto Law.”
I’m also grateful to my think tank counterparts who are alarmed by climate change and willing to have civil discussions about climate policy. At two Sphere Education Initiative events this year, I hosted Joseph Majkut, director of the Energy Security and Climate Change Program at the Center for Strategic and International Studies, to contrast our views for an audience of mostly high school educators. One participant later said she would have much more faith in Washington DC if members of Congress could take the same civil and respectful approach.
A Possible Permitting Win in 2026
This Christmas, the best present (by far) was the 3D printer my wife gave our 11-year-old. As I write this, he’s printing a red dragon that will have about a dozen interlocking pieces, all designed to be printed in one sitting and then peeled off the platform, ready to go. The pure joy a self-made toy brings him is a parent’s dream. The kid now has control over his own toy destiny—he can make just about anything he wants, and he doesn’t have to ask a toy regulator for permission.
The energy industry is the opposite. Thanks to laws like the National Environmental Policy Act, nearly every new piece of energy infrastructure requires mountains of paperwork that will inevitably be challenged by groups that despise whatever you’re doing. The CEO of Williams, the pipeline company, said, “The permitting costs alone are twice as much as what we’re spending on the pipe itself.”
It’s not just oil and gas pipelines. Permitting problems now span party lines and affect all energy resources. Writers at the Institute for Progress concluded the following: “If we want to see a clean energy transition in our lifetimes, we’ll need to let the infrastructure be built.” And President Trump unleashed “offshore wind carnage” by revoking permits for already approved projects, which further ingrained the mother-may‑I approach but also spurred the political left to engage on permitting reform.
Now that everyone’s ox is getting gored, permitting reform could be the big win in 2026. And we should go really big—we need the type of reform that comes from recognizing that arbitrary decisions from the executive branch are ruining our energy industry and holding back progress across the board. Maybe 2026 will be the year we reject the cult of the presidency and demand that Congress enact an approach that’s closer to permissionless and resilient to political whims.
An Energy Revolution
Across all these 2025 efforts, a theme of revolution emerged: America’s energy challenges are difficult and fundamental, but 2025 was the year we started breaking down old structures and building something better. We are turning the corner on the systems we’ve outgrown—monopoly regulation, lavish subsidies, and environmental rules written for the era of climate alarm.
We are well on our way to creating permissionless growth and bending the arc of energy policy toward freedom. I’ll leave you with the words of Thomas Jefferson and note that the monopoly structure of the electricity industry is more than a century old: “What country before ever existed a century and a half without a rebellion? And what country can preserve its liberties if its rulers are not warned from time to time that their people preserve the spirit of resistance?”
