Author :
Julie McNamara
Category :
Environment

Electricity Bills Are High. Trump Administration Policies are Set to Make them Soar.

   

 The Equation Read More [[{“value”:”

Electricity bills are up all across the country. On average, households are paying over 5 percent more than they did just one year ago, and in some states, 20 to 30 percent or more. Eighty million Americans could not afford their energy bills last year. Higher electricity costs are a pressing problem today, full stop.

But it’s not just what’s happening right now that’s deeply concerning—it’s also what happens next.

Because while today’s affordability challenges require urgent solutions, the ratcheting onslaught of power-hungry data centers is threatening to turn these challenges into a runaway crisis.

While decisionmakers at the state and local level are racing to navigate these issues, the Trump administration is actively exacerbating the problem, sidelining solutions while super-charging stressors across all the major points of friction.

In particular, the Trump administration is increasing demand for electricity at the exact same time as it’s constraining the availability of new electricity supply, resulting in a surging—and costly—supply-demand mismatch. But that’s not all. The Trump administration is also inflaming other major electricity cost drivers, including investments required for updating faltering grid infrastructure, preparing the electricity system for and helping it recover from increasing extreme weather events, covering rising natural gas prices, and managing market instability.

As a result, electricity costs aren’t just high: because of the antagonizing policies of the Trump administration, for many, they’re set to soar.

An unprecedented rapid surge in electricity demand, overwhelmingly the result of an AI-driven build out of data centers, is colliding with a steadily stacking set of constraints on new electricity supply with no end in sight. Without intervention, the result is a system on the brink: spiking electricity prices, limits on expanded use of electricity, and increasing reliance on costly, decrepit, and highly polluting power plants well overdue for retirement.

Unwinding the supply-demand mismatch requires action on both the demand and supply sides of the ledger.

For the demand side of the challenge,there’s what to do about data centers, and then there’s what to do about everything else. While “everything else” can be well-addressed by prioritizing investments in efficient and flexible use of electricity, data centers are posing novel challenges to the system: their electricity needs are absolutely massive, individually equivalent in use to entire cities, and they’re being erected seemingly overnight. Meanwhile, the rules and regulations that govern electricity supply, use, and costs were designed for gradual, incremental change.

In the gap, everyday electricity users—aka people and their monthly bills—have been left exposed and are subsidizing this literal power grab three times over: first in having paid for the electricity infrastructure that tech companies are now cashing in on; second in suddenly having to pay billions and billions more for new infrastructure being erected only because of new data centers alongside higher overall system costs; and third in bearing the overwhelming costs and risks of stranded assets if the AI bubble implodes, while tech companies are positioning themselves to simply walk away.

To shift the costs and risks back onto the shoulders of the tech companies that are causing them, UCS’s latest report recommends data centers should be required to bring their own new clean electricity, directly or through contracts, to ensure supply is keeping up with demand; be flexible to avoid contributing to intermittent periods of grid stress and high costs; and pay for higher induced system costs as well as purpose-built infrastructure, to insulate the public from near-term bill spikes and, just as critically, from the risk of stranded assets down the line.

But here’s what the Trump administration is doing instead.

To start, the administration has slashed access to the very easiest demand-side solution in the book: energy efficiency. In the budget bill President Trump signed into law last July, incentives for improving the efficiency of new and existing buildings, as well as new appliances, were slashed to zero within the year. The Trump administration has also repeatedly attacked and undermined the capacity of the Energy Star program and run roughshod over energy efficiency standards at the Department of Energy (DOE), which in one fit of pique announced the rescission of 47 standards in just one day. Beyond being a staggeringly bad deal for consumers (see this tracker from the Institute for Policy Integrity for the exact cost to consumers from all these rollbacks, on the order of hundreds of millions of dollars of lost benefits per year, per rule), these actions truly beggar belief in this electricity-constrained environment.

And then there’s managing demand from data centers.

While state-level decisionmakers are directly contending with managing data center energy system impacts, with responses ranging from fully steamrolling everyday people to contemplating temporary moratoria on new data center additions, the Trump administration has now attempted to insert itself straight into the middle of the narrative—and is doing so by attempting to play it both ways.

On the one hand, recognizing growing backlash to data centers at the local level and surging energy affordability challenges more broadly, the Trump administration is newly touting proposals that seek to shift data center costs back onto tech companies. For example, the Trump administration brought some of the largest tech companies to the White House in March to sign a voluntary “ratepayer protection pledge”—which theoretically could help, but for the fact that there are absolutely zero actual policies or regulations attached, nor does the administration have any authority over the policies outlined. That is not an accident. The Trump administration is plainly angling for an optics win while doing absolutely nothing to protect everyday people’s costs.

In a similar story, DOE Secretary Wright directed the Federal Energy Regulatory Commission (FERC) to begin a rulemaking that would standardize the process for connecting large loads (read: data centers) to the transmission system, as well as consider cost allocation related to those interconnections—but the directive was overwhelmingly focused on how to clear a path for expedited data center development, not defend against price spikes.

Meanwhile, the White House’s general approach to AI development, such as its July 2025 AI Action Plan, December 2025 executive order, and repeated efforts to shortcut permitting requirements and pollution regulations for new data center developments, point to an administration actually looking to fast-track AI at just about any cost—including uninhibited buildout of data centers and all their associated electricity demand.

To address the second half of bridging the supply-demand gap, resolving the supply side of the crunch,there’s one main fix: build, build, build. Build as much electricity generation as possible, as fast as possible, as cost-effectively as possible, and make it clean. Build power supplies and enabling infrastructure in ways that work for the needs of today and for the clear and pressing needs of the future—a future where, unquestionably, for economies to be competitive, economies must be clean.

The resources that check these boxes best are renewables, most prominently wind and solar, alongside energy storage. In the overwhelming number of cases, these resources are the cheapest, these resources are the quickest to deploy, these resources are reliable, and, critically, these resources are clean, meaning unlike new fossil fuel-fired generation, they will remain relevant and useful long into the future.

The second part of the supply solution can be counter-intuitive: let faltering power plants retire. If a power plant is too costly to run, too unreliable to be counted on, or too polluting to be safely operated, the power plant should retire. Propping up decrepit coal-fired power plants just wastes money, upends years-long multi-faceted planning, and gives a false sense of security while boxing out resources readily able to replace them.

Build what works and retire what doesn’t. Simple, right?

Except what the Trump administration is doing is exactly the reverse: it’s blocking entities from building what works, and it’s blocking entities from retiring what doesn’t.

Since Day 1, the Trump administration has been working to sideline wind and solar generation while pushing fossil fuels. Wind and solar are here, today, ready to roll—but the Trump administration is doing absolutely everything in its power to keep them offline. The country’s grid is on the precipice, and the administration is going full-out to sideline the overwhelming majority of the solution set.

Consider this. Since his term began, President Trump and/or his administration has:

The costs of these attacks are significant, in direct energy bill effects, in jobs lost, in investments cancelled, in innovation ceded, in sectors crushed—and because of the way they’re disrupting the pipeline of new projects and progress, the worst of these impacts won’t be fully felt for years to come.

Throughout all of these attempts to block new renewables, the Trump administration has slashed basic polluter accountability for fossil fuel-fired power plants and actively, repeatedly intervened in the market to force coal plants slated for retirement to stay online—even though utilities, regulators, and electric grid operators all want them closed, even though keeping them open is costing consumers tens to hundreds of millions of dollars apiece, even though they were each closing for a reason.

The Trump administration’s energy policy agenda of blocking what works and forcing reliance on that which doesn’t is a catastrophe, through and through.

The Trump administration’s gratuitous exacerbation of the supply-demand mismatch presents a significant and surging threat to electricity costs. But it’s not the only action by the Trump administration contributing to higher energy bills. In particular, each of four major additional drivers behind energy affordability challenges are also getting sent in the wrong direction by the Trump administration:

  • Exposure to rising and volatile fossil gas prices. Gas-fired electricity generation represented approximately 40 percent of the US electricity mix last year. In some parts of the country, the share is even higher. That makes electricity prices heavily impacted by the rising price of natural gas. The Trump administration is exacerbating this challenge on three fronts: first by attempting to push utilities to be even more dependent on gas; second by actively encouraging unmitigated growth in liquified natural gas exports, which is expected to drive the domestic price of gas far higher; and third by repeatedly sowing geopolitical instability in the very markets to which he is further linking the nation’s fossil gas supply.
  • Market instability. Since the very start of his term, President Trump and his administration have unrelentingly attacked the very foundations of what establishes the US as a stable investment and innovation environment. Foremost among these is President Trump’s reckless and destabilizing war and escalating embrace of violence. In addition, consider this: the imposition of shocking, arbitrary, and constantly shifting tariffs and disruption of global markets; fueling inflation; attempting to cancel nearly completedprojects; yanking billions upon billions of contracted and obligatedfunds; stifling and attempting to wholly dismantle the world-leading US scientific enterprise; weaponizing and politicizing the application of laws and policies; raiding a new, multi-billion dollar, collaboratively established factory; quitting long-standing and highly productive international coordinating bodies; to reneging on policies and regulations; and so much more. All of it, all of it, undermines the willingness and even basic ability of businesses to prudently commit to long-term investments, pursue the advancement of innovative technologies, and train and expand forward-looking workforces—which is exactly what this moment needs.
  • Costs of upgrading outdated grid infrastructure. One of the single largest electricity system cost drivers of the past decade-plus has been skyrocketing investments in grid infrastructure. These investments range from catching up on replacing outdated and faltering equipment; to shifting from analog to digital control systems; to boosting the resilience, flexibility, and reach of the system as a whole. While these upgrades are critically important, they’re also expensive—sometimes extremely so, especially when catching up on decades of deferred maintenance. But instead of helping to dampen these costs and facilitate savings, the Trump administration has cut entire offices dedicated to working on these issues, slashed funding and cancelled projects intended to help address these challenges, and increased the costs of hardware and components.
  • Costs of preparing for increasing extreme weather events. Extreme weather disasters, from hurricanes to flooding to wildfires and more, have always threatened the electricity grid, but as climate change has increased the frequency and/or severity of so many of these types events, utilities are entering a whole new era in terms of requirements for system preparation and resilience. Beyond increasing the direct costs associated with upgrading electricity grids, the Trump administration is also actively exacerbating the magnitude of the risk these systems will need to prepare for, as the administration unrelentingly hides evidence of climate impacts, denies climate science, impedes climate collaborations, and blocks any and all efforts to limit heat-trapping emissions.

Each of these issues is contributing to higher bills, and because of the actions of the Trump administration, each of these issues threatens to send future bills much, much higher than they otherwise would.

The Trump administration is unequivocally intervening in the electricity sector in a moment of crisis. The problem is, the Trump administration is the crisis, sidelining solutions while supercharging stressors. With policies like that, of course electricity affordability is careening toward a real and true emergency.

Of course, President Trump and his administration haven’t been working alone. In particular, the Republican-controlled Congress has repeatedly enabled, and often outright facilitated, the administration’s destructive agenda, from declining oversight of illegal administration actions, to weaponizing use of the Congressional Review Act, to drafting and passing a budget bill that severely undercut renewable energy while advancing fossil fuels. Alongside, numerous special interest groups have been more than happy to ignore the immediate as well as long-tail consequences of this administration’s actions while seizing on chances to advance their own particular interests.

But through it all, it’s been President Trump and his administration leading the charge.

Right now, people across this country need policymakers committed to implementing real solutions. The Trump administration is doing anything but—and because of that, we’re all paying the price.

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