Government regulation in the realm of energy policy is difficult due to the scope and diversity of regional energy differences, as well as the political context through which the issue is framed. There is largely a focus on the negative economic impacts of regulation, and a lack of emphasis on the possibility of economic success through transition to cleaner sources of energy. Ultimately, there is a general neglect in policy decision making of the connection between policy output on the national level and policy outcomes on the state and local level. By assessing the merits of different regulatory approaches and exploring the behavioral economic bases of effective past regulations, policymakers may overcome these challenges. This paper will address the tensions between federal, state, and local governments in the design and implementation of energy regulatory policy. A literature review will provide an explanation of the leading theories of regulatory policy design to serve as a framework through which to critique the national approach to energy policy. An exploration of relevant cases in energy and environmental policy, as well as telling analogues in education policy, will attempt to provide insight into the general failures of one-size-fits-all federal measures, as well as the difficulty associated with state-by-state variations in policy outcomes. Finally, a look into the proposed Clean Power Plan will assess the extent to which the federal government is taking note of these difficulties and transitioning to more wide-ranging flexible regulatory approaches in order to promote more effective outcomes and address pressing environmental issues.