Rising power prices are becoming a political liability for Republicans as electricity costs outpace inflation.
A recent Consumer Price Index report found electricity prices were rising at double the rate of inflation, having increased 5.5 percent over the past year.
And the general public may be starting to take notice.
“In the last couple of years, different items that have gone up in price have become media concerns. They become very visible, people get very angry — and I think electric rates are heading in that direction,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Association.
Wolfe said that if rates continue to rise, “it’ll become a political issue.”
The Trump administration is already seeing it as one — and trying to put the blame on Democrats and renewable energy.
“That is a key challenge for us,” Energy Secretary Chris Wright told Fox Business Network’s “Mornings with Maria” when asked about utility bills this week.
“Things move slowly in the electricity grid. All sorts of crazy projects were under construction and being built on your electricity grids over the last four years,” he said.
Wright, in a recent interview with Politico, similarly blamed “the momentum of the Obama-Biden policies.”
However, he lamented, “We’re going to get blamed, because we’re in office.”
President Trump has taken a similar tack, blaming renewables even though a greater supply of renewable power would actually be expected to bring costs down.
On Truth Social this week, he decried “ridiculous, corrupt politician approved ‘’windmills.’”
He also previously posted, “Any State that has built and relied on WINDMILLS and SOLAR for power are seeing RECORD BREAKING INCREASES IN ELECTRICITY AND ENERGY COSTS. THE SCAM OF THE CENTURY!”
While on the campaign trail, Trump promised to bring down electricity prices.
“Under my leadership, the United States will commit to the ambitious goal of slashing energy and electricity prices by half, at least,” he said at a rally last year. “We intend to slash prices by half within 12 months, at a maximum 18 months.”
Democrats are beginning to weaponize the issue against Republicans, especially after they repealed subsidies for wind and solar energy.
“The big, ugly bill is going to mean a lot of big, ugly energy bills arriving in the mail for Americans around the country,” Sen. Ed Markey (D-Mass.) said last month.
Experts say a buildout of renewables would help bring down prices, but the impacts of Trump’s moves are not being felt yet.
“Residential retail electricity prices are set with basically a lag,” Massachusetts Institute of Technology professor Christopher Knittel recently told The Hill. “Trump’s effects on the rate changes won’t take place until after the midterms.”
But they also note some of this administration’s policies, including those that attack renewable energy, are expected to exacerbate the issue in the future.
“It’s less power capacity being built, and then that means that there’s gonna be less supply of power and the same demand, so prices will be higher,” Thomas Rowlands-Rees, head of North America Research at BloombergNEF, said when asked about the repeal of renewable energy tax credits.
However, Knittel said blue-state policies that require a transition to renewable energy may also be contributing to the problem.
“Renewable policies in some of the blue states have put upward pressure on prices,” he said.
“Renewable portfolio standards that have forced or incentivized or regulated adoption of more renewables, partly with the idea that the Inflation Reduction Act would provide some financial support for that, and now that’s gone, or will be gone — that’s going to put upward pressure on prices,” Knittel said, noting the combination of the Democrat standards and Republican subsidy repeal are both contributing to this issue.
Meanwhile, Rowlands-Rees noted the Trump administration’s push to export more liquified natural gas (LNG) may also raise consumer electric prices.
“If the U.S. is increasing its ability to export that gas as LNG, where the exporters will make a much bigger profit than selling it locally in the U.S., then a lot of that gas will then go abroad, and so the more capability the U.S. has to export its gas, the higher gas prices will be in the U.S., for U.S. citizens,” he said.
“There’s such a huge contrast between the global price of gas and the domestic U.S. price of gas … and the only reason the two aren’t the same is because of this limited ability to export,” he added. “The U.S. is in this little bubble of cheap gas, and so the more that bubble is burst by pro-LNG export policies, the more … U.S. gas prices start to look like the rest of the world.”
U.S. electricity primarily comes from gas, coal, renewable and nuclear energy.
Another major driver of price increases is the buildout of data centers, as AI and other technologies are particularly power-hungry. If these centers don’t come with their own power source, they may just use whatever’s on the grid, driving up demand.
“There is this upward pressure because of data centers,” Rowlands-Rees said.
Both Democrats and Republicans have been at least somewhat supportive of boosting construction of data centers, though the Trump administration has particularly put forward plans to fast track them.
But Knittel said that’s just one factor contributing to the higher prices seen today.
“You also have climate change that is increasing wildfire risks,” he said. “That’s putting upward pressure on prices … on the West Coast.”
Meanwhile, Wolfe, with the National Energy Assistance Directors’ Association, also expressed concerns about the Trump administration’s efforts to slash a financial assistance program that helps low-income Americans afford to heat and cool their homes.
While this program has historically had bipartisan support and is likely to get money from Congress, the Trump administration has proposed defunding it.
“Even if Congress goes ahead and gives … funding, [it] doesn’t mean they’re going to spend it,” Wolfe said. “If you don’t have access to appropriate cooling and heating, you can die.”
