Public Health Metrics Must Be Central to Energy Utility Policy As Electricity Demand Soars
Every American depends on electricity to power homes, transportation, communications, and perform daily tasks. Yet the nation’s energy system remains one of the largest determinants of public health. The current U.S. energy system, which relies upon 60% fossil fuel burning, is the driver of air pollution, in particular toxic particulate matter (PM2.5) and gases (NOx, SOx) that contribute to up to 91,000 premature deaths and hundreds of thousands of hospitalizations each year from respiratory and cardiovascular diseases. These health burdens impose an estimated $900 billion in annual health damages, disproportionately affecting disadvantaged communities. This memo recommends that state Public Service Commissions (PSCs) take concrete regulatory and statutory actions to ensure that public health protection becomes a core pillar of energy utility planning and investment, which currently are oriented toward least-cost supply, grid reliability, and climate mitigation.
Recent developments make this an opportune moment to implement the proposed plan of action. Firstly, the One Big Beautiful Bill Act (OBBA) 2025 (H.R.1) substantially reduced federal support for clean energy deployment and federal healthcare spending (over $1 trillion across the next decade), thus increasing pressure on states to prevent disease through non-healthcare interventions. Secondly, accelerating demand from artificial intelligence (AI) data centers (Ratepayer Protection Pledge, SHIELD Act, Ratepayer Protection Act) is prompting utilities to approve tens of gigawatts of new energy generation and transmission infrastructure, which is predicted to have health burdens costs of up to $20 billion by 2028. Thirdly, the Environmental Protection Agency (EPA) health cost rollback has deepened (stopped calculating health PM2.5/ozone and financial benefits by rescinding the 2009 greenhouse gas endangerment finding).
State Public Service Commissions (or the similarly purposed Public Utility Commissions) are facing greater responsibility than ever to integrate public health considerations and they are uniquely positioned to respond because they already oversee Integrated Resource Plans (IRPs) and utility investment decisions. This memo outlines regulatory actions, built into existing processes without creating new agencies, and supported by precedents already adopted in multiple states.
Challenge and Opportunity
Scientific evidence overwhelmingly demonstrates that air pollution poses a growing and underrecognized threat to the U.S. public health. Large cohort studies reveal that long-term exposure to fine particulate matter significantly increases hospitalizations and mortality from cardiovascular and respiratory diseases, even at concentrations below current U.S. regulatory limits. Earlier landmark research, including the Harvard “Six Cities” study and nationwide analyses, found that chronic air pollution exposure elevates risks of ischemic heart disease, stroke, and all-cause mortality across diverse populations. More recent evidence links PM2.5 exposure to additional chronic conditions, including diabetes, cognitive decline, and chronic kidney disease. The biological mechanisms linking pollution to systemic inflammation, hypertension, and cardiac dysfunction have also been well-researched. Particulate matter now ranks as the fifth leading mortality risk factor nationwide, and empirical evidence shows that reductions in PM2.5 concentrations across multiple U.S. cities are associated with measurable declines in mortality rates. Economically, air pollution–related illnesses impose staggering costs. Excluding numerous deaths, U.S. health damages from fossil-fuel emissions are estimated to cost $360–$900 billion annually. Taken together, this evidence demonstrates that improving air quality through explicit reductions in harmful air pollutants is not only an environmental priority but a public health and fiscal imperative.
Simultaneously, recent federal developments have reduced the likelihood that these health externalities will be incorporated into national regulatory analyses. Therefore, rather than replacing federal environmental regulation, state PSCs can complement it by ensuring that public health is explicitly incorporated into current and new investment decisions that already fall within their statutory authority.
Current utility planning prioritizes least-cost electricity supply, affordability, grid reliability, and energy efficiency, but typically excludes the public health costs associated with air pollution. While federal and state energy policies emphasize reductions in greenhouse gas emissions through cleaner energy deployment, they often do not adequately account for reductions in co-pollutants (such as fine particulate matter and nitrogen oxides) that drive significant public health harms and associated healthcare costs. This omission reflects the absence of standardized tools within utility planning to quantify and monetize health impacts, despite a well-established scientific evidence base.
Health impacts from air pollution vary substantially by location, energy source, population characteristics, and disease pathway, underscoring the importance of incorporating localized health assessments into long-term planning decisions. Integrating public health considerations into Integrated Resource Plans (IRPs), the roadmaps for forecasting electricity demand, and related regulatory filings would enable PSCs to more accurately evaluate the full costs and benefits of generation, transmission, and storage investments. Several states have begun to address this gap. Michigan recently became the first state to require health impact assessments (HIA) in long-term energy planning, while states such as Massachusetts, Minnesota, New York, and New Jersey have adopted cumulative impact frameworks to holistically assess pollution burdens in communities facing disproportionate exposure.
And in the current wave of AI data centers, states are already shifting from incentive-based policy to regulatory oversight (for example, more than 100 bills on AI data centers have been introduced). PSCs should require utilities to quantify avoided healthcare costs, reduction in pollution exposure, and improvements in population health alongside traditional metrics.
Our cost-benefit analyses suggest that incorporating health impacts into utility planning has the potential to generate up to $300 billion annually in net health benefits. This is made possible through avoided hospitalizations, reduced premature mortality, and lower climate-related damages, in addition to improvements in local air quality if those analyses lead to health protective planning and investment decisions. Public health therefore should be viewed not as an externality to utility regulation, but one of its principal outcomes.
Plan of Action
Recommendation 1. Amend state energy statutes to explicitly include public health protection as a regulatory objective.
Most state utility statutes direct regulatory agencies (including PSCs and Public Utility Commissions) to balance affordability, reliability, and safe utility service. While these mandates provide substantial discretion, including long-term energy infrastructure planning, public health is rarely identified as an explicit regulatory objective. Such omissions lead to inconsistent health impacts across IRPs, certificate proceedings, and major energy investments.
We recommend that states that need utility statute amendments, should do so through legislative or executive action. PSCs should require IRPs to explicitly include public health assessments aligned with the cost–benefit evaluation of energy strategies in near and long-term planning.
To evaluate energy system costs, PSCs should use system-level modeling, such as least-cost planning, which accounts for both capital expansion and operational costs. To assess health benefits, life-cycle health impact assessments (HIAs) should be applied to quantify pollutant emissions and translate them into population-level impacts using established concentration–response relationships. Cost-of-illness (COI) modeling can then estimate reductions in healthcare spending and the value of avoided morbidity and mortality associated with different energy sources. These metrics would allow consistency and PSCs to prioritize long-term clean and affordable energy infrastructure investments that maximize public health benefits. For instance, New York’s Community Health and Air Pollution Policy (NY-CHAPPA) framework is an exemplary tool to evaluate the health benefits of decarbonization, which was recently employed in the 2025-2026 New York State Energy Plan.
Recent EPA policy changes, including the decision to no longer quantify impacts to life and healthcare spending when setting ozone and particulate matter standards, heighten the need for states to take a proactive role in integrating health considerations into utility regulation.
Recommendation 2. Require reductions in harmful air pollutants and healthcare costs as a targeted metric within the energy efficiency framework.
Energy efficiency regulation presents inherent incentive conflicts, as utility profits are often misaligned with reductions in greenhouse gas emissions and lower electricity rates for consumers. States currently regulate energy efficiency through frameworks such as Energy Efficiency Resource Standards (EERS), which vary widely in target design and stringency across jurisdictions. These policies primarily focus on affordability and energy savings through measures such as building codes, appliance efficiency standards, and rate designs that encourage customer investments.
We recommend that PSCs explicitly incorporate reductions in particulate emissions and healthcare costs as key performance metrics within EERS targets, alongside traditional measures such as transmission efficiency and end-use energy savings. Commissions should require utilities to monetize public health co-benefits using established epidemiological methods and integrate these values into cost–benefit analyses for generation, transmission, and storage investments. Defining energy efficiency in alignment with health outcomes and pollutant reductions would create opportunities for expanded investment in energy efficiency infrastructure and programs that deliver both economic and public health benefits.
Recommendation 3. Establish health advisory structures that link state health, energy, and environmental agencies to standardize health impact methodology.
Like legal, financial or engineering expertise is integrated when evaluating utility investments, we recommend that PSCs establish formal or informal health advisory councils. These health advisory councils would link state health departments, energy offices, environmental agencies, and utility regulators.
Councils should be multidisciplinary and include expertise in public health, epidemiology, environmental health, health economics, data and statistical analysis, utility planning, and energy systems and engineering. They should also include representatives of communities disproportionally affected by pollution or utility infrastructure. Community representatives would provide lived expertise that may not be captured in the administrative datasets. PSCs should establish transparent nomination and selection procedures, publish council memberships and conflicts of interest. Community representatives should be selected through processes that involve affected communities and community-based organizations.
These bodies should be tasked with:
- developing and maintaining standardized methodologies for health impact assessments used in Integrated Resource Plans (IRPs), rate cases, and major infrastructure filings;
- reviewing utility submissions for consistency in health assumptions, data sources, and valuation methods;
- issuing non-binding technical guidance or staff reports to inform Commission decisions;
- identifying priority health indicators, such as reductions in particulate matter exposure, occurrence of specific diseases, energy cost burdens, avoided hospitalizations, and healthcare cost savings, and recommend how these indicators can be incorporated into cost–benefit analyses and performance metrics.
Unlike traditional advisory committees—which are convened for individual proceedings or policy initiatives for specific input without maintaining a technical methodology across regulatory decisions—these councils will provide durable analytical capacity, thereby institutionalizing public health expertise within utility regulation. Their recommendations would remain advisory rather than regulatory, preserving the commission’s independence. Regular coordination meetings, shared data protocols, and annual public reporting on health impacts of utility decisions would ensure transparency and institutional continuity.
Conclusion
Integrating public health as a core pillar of energy utility policy is feasible and highly critical, as the next decade presents an unusually consequential opportunity to modernize the current framework. By explicitly incorporating standardized health impact assessments into utility planning, institutionalizing public health expertise within commission proceedings, and requiring transparent reporting of health outcomes, PSCs can guide investments in low-carbon energy infrastructure that reduce morbidity and mortality, improve fiscal outcomes, and strengthen the resilience of the energy system. Prioritizing health alongside reliability and cost ensures that state energy policy delivers tangible benefits for all communities.
Federal support and willingness to weigh health impact assessments in energy and air-quality assessment have been receding. EPA has stopped including health benefits from PM2.5 and ozone exposure in cost-benefit analysis in 2025, repealed the 2009 greenhouse gas endangerment finding in 2026, repealed tax credits for electric vehicles secured under the Inflation Reduction Act (IRA). Today’s Administration is currently requesting replacement of the 2024 particulate matter standards with weaker ones, and is working towards rolling back the Mercury and Air Toxics Standards (MATS). This leaves states as the primary arbiters of health considerations in shaping utility investment decisions, and PSCs already hold statutory authority to require proposed analyses through IRPs without waiting on Congress or EPA.
Not necessarily and likely the opposite. States are moving quickly to prevent data centers from shifting costs to ratepayers. At present there are 100 bills put forward by states to do this. More than 20 states have approved large-load tariffs that require large energy users to pay the full cost of infrastructure. Congress has introduced the SHIELD Act and Ratepayer Protection Act. Our recommendations reinforce that logic. By requiring health cost accounting in planning, PSCs can identify which infrastructure investments pose the least health risk to the community.
Cumulative impact frameworks, as adopted in MA, MN, NY, NJ, focus on identifying and protecting disproportionately burdened communities from additional harms. Our proposal is complementary but broader. Our recommendations require utility-wide, system-level health cost accounting across every IRP and rate case, not just specific communities, so health considerations shape which generation, transmission, and efficiency investments are chosen in the first place.
No. The proposed councils are advisory rather than regulatory and build upon existing state institutions. They do not approve or establish new permitting requirements. Instead, they provide independent health impact assessments that feed into PSC decisions (see recommendation 3). Its output, standardized methodology and staff guidance, plugs directly into planning and rate decisions PSCs already make.
A single state could pilot the model by directing its PSC through legislation or executive action, and requiring a health impact assessment in its next IRP cycle based on EPA’s COBRA framework, like Michigan’s approach. Alabama’s SB 270 already directs its PSC to condition large laid interconnection approval on demonstrated ratepayer benefit. Similar structures could be extended to require an equivalent demonstration of health benefit.
Implementation costs are modest relative to the health and fiscal benefits at stake. Already established methodologies and tools that states use can be employed, for example, EPA’s COBRA or BenMAP, and can be funded through existing PSC assessment fees or ratepayers funded programs. The NY 2025-2026 State Energy Plan has already demonstrated full public health analysis by utilizing COBRA and a state-specific sub county model (NY-CHAPPA).
Utilities may raise concerns about added compliance costs and delays. Others may argue that health-impact methods are too uncertain to apply in regulatory settings. However, the underlying modeling framework (EPA’s BenMAP) was independently reviewed by a Scientific Advisory Board in 2024, and it found it scientifically sound and appropriate for use. States can therefore rely upon existing federal tools.
Public service commissions should require utilities to quantify avoided healthcare costs, reduction in pollution exposure, and improvements in population health alongside traditional metrics.
California just took an important step toward making electric trucks more affordable and easier for businesses to buy.
In 2023 alone, more than 2,300 people died in the United States directly from extreme heat. Expanding access to residential air conditioning could reduce heat-attributable deaths and adult emergency department.
America’s affordability problem is bigger than home prices and rents. The best housing policies make it easier to build homes, and recognize how housing connects to other domains.