Look no further than the recent state of the state addresses to understand the hot-button issues facing state executives, legislators, regulatory agencies, and communities across the country. Over the past several weeks, governors from 25 states provided their annual state of the state addresses to lawmakers and the public. While the issues covered were expansive, several key energy sector trends emerged that align with the challenges facing state legislators and regulators in 2026 and beyond.
From Stateside’s latest 2026 Governors’ State of the State Addresses Report, we have identified the latest trends on how state executives are addressing the impacts, challenges, and opportunities across the energy sector.
Protecting Consumers
Perhaps the most striking theme of 2026 is the impact that data center energy demand is having on states across the country and how frequent that issue has appeared in the state of the state addresses. In Indiana, Governor Mike Braun (R) acknowledged that the economic benefits and jobs from the tech sector and large energy consumers are “key to the jobs of the future,” but indicated large power customers must “pay their own way.” With affordability as one of his top priorities, Governor Braun expressed support for legislation to hold investor-owned utility companies accountable to provide affordable energy before they can increase their profit margin.
Arizona Governor Katie Hobbs (D) indicated affordability as her key priority and proposed working with both parties to eliminate a $38 million Data Center Tax Exemption in the Executive Budget. In New York, Governor Kathy Hochul (D) echoed these concerns, noting that while data centers are vital for the future, they "guzzle up tremendous amounts of energy." She is moving to streamline utility assistance to help homeowners make energy efficient upgrades in their homes.
Addressing Affordability
As mentioned above, energy affordability was a key part of governors' broader "affordability" agenda. Several states announced massive financial interventions to lower the energy burden of rising energy costs for families.
In Rhode Island, Governor Daniel McKee (D) unveiled a plan to provide over $1 billion in energy relief over the next five years. His proposed budget will reduce the current 25% of consumers’ energy bills that come from state programs and taxes.
Kentucky Governor Andy Beshear (D), while promoting the state’s rank of top 5 economic development for the fifth year in a row, proposed a $75 million fund dedicated to helping residents pay their utility bills. Alaska Governor Mike Dunleavy (R) highlighted the importance of the Alaska Affordable Energy Fund and the potential for millions of dollars to flow into rural energy projects.
Governor Hobbs also proposed the creation of the Arizona Affordability Fund to help families pay their utility bills, weatherize their homes to lower energy costs. Similarly, in Virginia Governor Abigail Spanberger’s (D) first address to a Joint Session of the General Assembly, she proposed expanding home energy efficiency programs and rejoining the Regional Greenhouse Gas Initiative. These moves would generate millions of dollars for flood mitigation, energy efficiency, and help lower bills for residents.
Solving the Need for Energy Demand
As the energy grid reaches capacity, states are pivoting toward "24/7" generation sources—most notably nuclear power – to solve the need for more energy.
Governor Hochul announced a major shift for New York, setting a goal to build 5 gigawatts of nuclear power and launching a nuclear workforce development program. Missouri Governor Mike Kehoe (R) also signaled a strong commitment to nuclear, establishing an Advanced Nuclear Energy Task Force to fast-track deployment, while stating that Missouri is open for AI and open for business. In South Carolina, Governor Henry McMaster (R) stated that his state will lead the nuclear renaissance.
Meanwhile, Nebraska is looking at deregulation as a solution. Governor Jim Pillen (R) called for legislation to remove "red tape" for large power users like AI and bioeconomy plants, allowing them to build their own power plants and sell excess electricity back to the grid.
The Wrap
The 2026 State of the State Addresses offers insight into how governors are providing unique solutions to the challenges to meet the future energy needs in their states, and across the county. As state legislative sessions continuing to ramp up, governors and state policymakers are posturing to ensure their state’s interests are front and center; by acting as gatekeeps to address the impact of energy infrastructure, while delicately balancing the needs to attract new economic development opportunities for large customers and their energy needs.
