Rising electricity prices are turning into a political challenge for US President Donald Trump and the Republican Party.
The Hill (USA) cited recent information on the consumer price index (CPI) showing that electricity prices have increased twice as much as the inflation rate, equivalent to 5.5% over the past year.
Public opinion has begun to show clear interest in this issue. Mr. Mark Wolfe at the National Association of Energy Assistance Directors said: “In the past few years, any item that increases in price quickly becomes a hot topic in the media. It is easy for the public to see it, to cause outrage, and I believe electricity prices are following that trajectory.”
Mr. Wolfe added: “If prices continue to increase, it will certainly become a political issue.” According to The Hill, President Trump’s administration has sought to blame the Democratic Party and renewable energy for contributing to the increase in electricity prices.
“It’s a big challenge for us,” Energy Secretary Chris Wright said this week when asked about electricity bills on Fox Business. “The grid is slow. Over the last four years, we’ve had all sorts of weird projects built and put on the grid.”
In a recent interview with Politico, Wright also blamed the policies of former Presidents Barack Obama and Joe Biden. “We’re going to get blamed because we’re in power,” he complained.
President Trump has taken a similar approach, blaming renewable energy, despite the fact that more renewable energy would help lower costs. On Truth Social this week, Trump criticized “ridiculous windmills that are approved by corrupt politicians.”
He also previously posted: “Any state that builds and relies on wind and solar power is experiencing record-breaking increases in electricity and energy prices. This is the scam of the century!”
During the 2024 election campaign, Mr. Trump himself pledged to take action to lower electricity prices. At that time, he affirmed: “Under my leadership, America will commit to an ambitious goal of cutting electricity and energy prices by at least half. We plan to cut them in half within 12 months, up to 18 months.”
Professor Christopher Knittel at the Massachusetts Institute of Technology (MIT) analyzed with The Hill: “Retail electricity prices often have a lag. The impact of President Trump’s policies on the price list will not appear until after the midterm elections.”
However, many experts also warn that some of the Trump administration’s policies, especially those that are difficult for renewable energy, could make the situation worse in the future.
Mr. Thomas Rowlands-Rees, Head of North America Research at BloombergNEF, commented on the abolition of tax incentives for renewable energy: “As the number of new power projects decreases, energy supply will be tight while demand remains unchanged, leading to escalating prices.”
However, Knittel said that policies in Democratic-controlled states that require a shift to renewable energy may also be contributing to the problem.
“Renewable energy policies in some Democratic-controlled states have created upward pressure on prices,” he noted. “Renewable portfolio standards have forced, encouraged, or regulated the adoption of more renewable energy, partly based on the expectation that the Deflation Act would provide financial support.
However, that support has now disappeared or will disappear, pushing prices higher. The combination of the Democratic standards and the Republican rollback of subsidies are both contributing to the problem.”
But Thomas Rowlands-Rees noted that the Trump administration’s push to export liquefied natural gas (LNG) could result in higher consumer electricity prices in the US.
Thomas Rowlands-Rees argues that if the US increases its LNG export capacity, more gas will be shipped overseas.
This means that the more export capacity there is, the higher the domestic price of gas for Americans. LNG exporters will make much more profit than if they sold it in the US domestic market.
He added: “There is a huge gap between global gas prices and US domestic gas prices… The only thing that is not similar is the limited ability to export.
The US is in a ‘bubble’ of cheap gas; and as that bubble is deflated by policies that encourage LNG exports, US gas prices will move closer to world prices.”
In the US, electricity supply is mainly supplied by gas, coal, renewables and nuclear.
Another big driver of rising US electricity prices is the boom in data centers, as artificial intelligence (AI) and other technologies consume huge amounts of electricity.
If these centers do not have their own power sources, they draw directly from the grid, driving up demand. “The upward pressure on prices is coming from the data centers,” Rowlands-Rees said.
Both Democrats and Republicans have some support for the expansion of data centers. But Knittel said that is only one factor in the current price picture. “Climate change increases the risk of wildfires,” he argued. “That puts upward pressure on prices… especially on the West Coast.”
Meanwhile, Wolfe is concerned about the Trump administration’s efforts to cut financial assistance programs that help low-income Americans heat and cool their homes.
The program has bipartisan support and is likely to continue to be funded by Congress, but the Trump administration has proposed ending funding. “Even if Congress approves funding, that doesn’t mean it will be disbursed,” Wolfe warned.