The paper conducts an in-depth study on the cross-subsidy policy for residential electricity consumption in Tangshan City from 2015 to 2024, focusing on its broader implications. The research evaluates how this policy has affected energy conservation and emission reduction efforts. The findings suggest that while the policy, designed to subsidize low-cost residential electricity, has been successful in encouraging greater electricity consumption among households, it has also led to price distortions. These distortions result in an imbalance in electricity pricing, which could undermine long-term sustainability goals by disincentivizing energy efficiency and conservation measures. The study concludes with a prediction of the policy’s future impact on energy and environmental strategies.