What is a Renewable Portfolio Standard?
What it is
An RPS sets a percentage target for renewable energy as a share of a utility's retail electricity sales. The target rises over time on a published schedule. Utilities comply by:
- Owning renewable generation directly (solar, wind, geothermal, sometimes hydro)
- Buying renewable electricity from third-party producers
- Buying tradable Renewable Energy Credits (RECs) from other states or utilities
- Paying penalties for non-compliance (Alternative Compliance Payments)
Each state's RPS varies. Some require 100 percent "carbon-free" electricity by a specified year (Hawaii, Washington, California, New York, Oregon, Maine). Others set partial targets (35 to 50 percent). About 30 states have mandatory RPS programs; another 7 have voluntary goals.
Why we cover it on a gasoline site
An RPS does not directly affect gasoline prices. It regulates electricity rather than motor fuel. We discuss RPS programs here for two reasons:
- RPS programs are highly correlated with state political control. All 16 states under unified Democratic control as of 2026 have mandatory RPS programs. Only 5 of 22 unified Republican-controlled states do.
- States with aggressive RPS programs frequently also adopt transportation-fuel programs (LCFS, cap-and-trade, vehicle electrification mandates) that do directly affect gasoline prices.
In our regression analysis, RPS status barely moves the residual Blue-state gasoline-price gap (from $0.13 to $0.11 per gallon when included). This tells us that the gasoline-price gap between Blue and Red states is not primarily about electricity-sector regulation. It is about gasoline-specific policies.
RPS programs by state
About 30 states have mandatory RPS or Clean Energy Standards. Notable examples:
| State | Current target | Notes |
|---|---|---|
| California | 60% by 2030, 100% by 2045 | Includes large hydro after 2030 |
| Hawaii | 100% by 2045 | Most aggressive non-California target |
| New York | 70% by 2030, 100% by 2040 | Climate Leadership and Community Protection Act |
| Washington | 100% by 2045 | Clean Energy Transformation Act |
| Massachusetts | 40% RPS Class I by 2030 | Plus Clean Energy Standard |
| Maryland | 50% by 2030 | Plus offshore wind requirement |
| Texas | 5,880 MW (achieved) | Original goal met in 2009 |
How RPS affects electricity prices
Although not gasoline-relevant, RPS programs have well-documented effects on electricity prices. The Institute for Energy Research's "Blue States, High Rates" report documents that states with aggressive RPS programs and 100-percent clean-electricity targets consistently have higher electricity prices than states without such mandates. The relationship is large: states with 100-percent renewable targets average about 50 percent higher residential electricity rates than the national average.
How RPS relates to gasoline policy
States that have adopted aggressive RPS programs have also been the most likely to adopt:
- State-level cap-and-trade programs covering motor fuel (California, Washington)
- Low Carbon Fuel Standards (California, Oregon, Washington)
- Electric vehicle mandates (California's Advanced Clean Cars II rule and 16 follower states)
- Higher gasoline excise taxes
The pattern is the same broader regulatory orientation that produces aggressive electricity policy also tends to produce aggressive transportation-fuel policy. The mechanisms differ but the political-economy correlation is strong.
FAQ
Does an RPS make gasoline more expensive?
Not directly. An RPS regulates electricity, not motor fuel. But states with aggressive RPS programs are more likely to also adopt gasoline-relevant programs like cap-and-trade on motor fuel or a Low Carbon Fuel Standard, which do raise gasoline prices.
What is the difference between an RPS and a Clean Energy Standard?
An RPS typically counts only renewable sources (wind, solar, geothermal, hydro). A Clean Energy Standard (CES) is broader and may include nuclear and some natural gas with carbon capture. Some states (New York, Washington) have adopted CES frameworks that supersede their earlier RPS programs.
What is a Renewable Energy Credit?
An REC represents one megawatt-hour of electricity generated from a qualifying renewable source. Utilities that need to comply with an RPS can buy RECs from other producers rather than generating renewable electricity themselves. RECs can trade across state lines under most state programs.
Sources
- U.S. Energy Information Administration, State Renewable Energy Profiles.
- National Conference of State Legislatures, State Renewable Portfolio Standards and Goals, 2025.
- Pyle, Stein, and Stevens, "Blue States, High Rates," Institute for Energy Research, December 10, 2025.
- Institute for Energy Research, "States With Aggressive Renewable Portfolio Standards Will Continue to Face Rising Prices and Reliability Problems," August 25, 2023.