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ELECTRICITY PRICES ARE SURGING. THE G.O.P. MEGABILL COULD PUSH THEM
HIGHER.  
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Brad Plumer, Rebecca F. Elliott
June 4, 2025
The New York Times
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_ The combination of a data center boom, rising gas exports and cuts
to clean energy tax breaks could spike American energy bills, analysts
say. _

Electricity demand is surging for the first time in decades, partly
because of data centers needed for A.I., and power companies are
already struggling to keep up., Brandon Bell/Getty Images

 

The cost of electricity is rising across the country, forcing
Americans to pay more on their monthly bills and squeezing
manufacturers and small businesses that rely on cheap power.

And some of President Trump’s policies risk making things worse,
despite his promises to slash energy prices, companies and researchers
say.

This week, the Senate is taking up Mr. Trump’s sweeping domestic
policy bill, which has already passed the House. In its current form,
that bill would abruptly end
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of the Biden-era federal tax credits for low-carbon sources of
electricity like wind, solar, batteries and geothermal power.

Repealing those credits could increase the average family’s energy
bill by as much as $400 per year within a decade, according
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The studies rely on similar reasoning: Electricity demand is surging
for the first time in decades, partly because of data centers needed
for artificial intelligence, and power companies are already
struggling to keep up. Ending tax breaks for solar panels, wind
turbines and batteries would make them more expensive and less
plentiful, increasing demand for energy from power plants that burn
natural gas.

That could push up the price of gas, which currently generates 43
percent of America’s electricity.

On top of that, the Trump administration’s efforts to sell more gas
overseas could further hike prices, while Mr. Trump’s new tariffs on
steel, aluminum and other materials would raise the cost of
transmission lines
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other electrical equipment.

These cascading events could lead to further painful increases in
electric bills.

“There’s a lot of concern about some pretty big price spikes,”
said Rich Powell, chief executive of the Clean Energy Buyers
Association, which represents companies that have committed to buying
renewable energy, including General Motors, Honda, Intel and
Microsoft.

A study commissioned by the association
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that repealing the clean electricity credits could cause power prices
to surge more than 13 percent in states like Arizona, Kansas, New
Jersey and North Carolina and lead to thousands of job losses
nationwide by 2032.

Trump administration officials, along with many in the gas industry,
disagree. They argue that Mr. Trump’s efforts to make it easier and
cheaper to drill and to build pipelines will lower electricity prices
over the long term. They also say wind and solar power technologies
have already received subsidies for decades and that expanding them
too rapidly risks making the electric grid less reliable.

Meta’s Eagle Mountain Data Center under construction in Utah last
November. Christie Hemm Klok for The New York Times

“President Trump’s agenda is to lower the cost of oil production
in the United States, lower the cost of natural gas production in the
United States — that ultimately will lead to lower average prices
and at the same time profitability for businesses,” said Ben
Dietderich, an Energy Department spokesman.

He added that “prices are going to move up and down in the short
term,” but that the administration was focused on policies “that
will deliver long-lasting prosperity.”

While government forecasters expect electricity prices to rise
quickly over the next two years
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gasoline prices for cars will fall, offsetting some household costs.
Oil prices have already declined nearly 20 percent since Mr. Trump
took office, partly because of concerns that his tariffs could slow
global economic growth.

Still, the threat of rising electricity bills has made some lawmakers
nervous about scrapping federal support for clean energy.

“Given rising energy demand, it is imperative that any modifications
to the tax code avoid worsening the economic pressures that American
households and businesses already face,” Senator Lisa Murkowski,
Republican of Alaska, wrote in a letter
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three fellow Republicans in April. Repealing some tax breaks “would
translate into immediate utility bill increases, placing additional
strain on hardworking Americans,” they wrote.

Why electricity prices have been rising

Since 2022, U.S. residential electricity prices have risen 13 percent
on average, outpacing inflation, according to the Energy Information
Administration
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England, the Mid-Atlantic and the West Coast, prices are increasing
even faster.

The shocks are also being felt in places like Ohio, where this month
rates are rising
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26 percent, on average — hundreds of dollars more per year for many
families — as energy-hungry data centers flood the state.

The causes of rising rates are complex
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In California, utilities face soaring costs from worsening wildfires.
Elsewhere, power companies are spending tens of billions of dollars to
upgrade aging electric grids and prepare for weather disasters,
electric vehicles and growing amounts of renewable energy.
Transmission and distribution costs have been soaring
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up nearly 40 percent of power bills.

One big driver has been fluctuating natural gas prices. After Russia
invaded Ukraine in 2022, gas prices spiked and so did electricity
bills. While gas prices fell to record lows last year, they are
expected to nearly double this year
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demand rises at home and the U.S. sells more of its gas abroad.

Dropping fire retardant on the Palisades fire in Los Angeles in
January. Loren Elliott for The New York Times

The United States already exports roughly 11 percent of its gas in the
form of liquefied natural gas, or L.N.G., much of it to European and
Asian countries willing to pay a premium. U.S. export capacity is set
to nearly double by 2028
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companies are demanding ever more gas power for data centers.

“L.N.G. was already a tidal wave of demand and now you’ve just got
on top of it these other forces,” said Gordon Huddleston, president
and partner of Dallas-based Aethon Energy, one of the largest
privately held gas producers in the country. “Every real estate guy
in Dallas is running around developing a data center.”

On top of that, the cost of building gas power plants has nearly
tripled since 2022, and power companies now face wait times of five
years or more for new gas turbines
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Tariffs are also making it more expensive to drill for natural gas by
raising the cost of equipment such as steel pipe.

Many businesses fear a strain.

“Whenever there’s an inadequate supply of natural gas or
electricity, manufacturing’s the first thing to be curtailed,”
said Paul Cicio, president of the Industrial Energy Consumers of
America, a trade association that represents energy-intensive
manufacturers in steel, aluminum, plastics, chemicals and paper.

Mr. Cicio said that this past winter, pipeline operators told some of
his member companies to curb their gas use because of inadequate
supplies.

In 2020, 34 million households reported difficulties in paying their
energy bills
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kept their homes at unsafe temperatures because of cost concerns.

The crunch comes as the Trump administration wants to end the Low
Income Home Energy Assistance Program, a $4 billion federal fund that
helps 6.2 million people from Texas to Maine pay for high heating and
cooling bills. The White House called the program “unnecessary,”
and said families would be helped by policies that lowered energy
prices.

“We’ve got millions of families that are already struggling to pay
their bills,” said Mark Wolfe, executive director of the National
Energy Assistance Directors Association. “Now you bring in extreme
temperatures, record heat, and it’s a very bad situation.”

A fight over power bills

There are several competing ideas to ease electricity prices.

One strategy, popular with the oil and gas industry, is to expand gas
production and ease permitting for new pipelines.

Natural gas “is still the most cost-effective energy solution out
there,” said Toby Rice, chief executive of Pittsburgh-based gas
producer EQT. One of the biggest drivers of rising prices, he said,
was a lack of pipelines. “It’s the bottlenecks that have been
created.”

The Cheniere Texas LNG facility in Portland, Texas. Callaghan
O'Hare/Reuters

But many power companies and analysts argue that the clean electricity
tax credits are essential for keeping a lid on power prices in the
near term.

That’s because companies were already planning to build a bunch of
wind, solar and batteries in the next few years, which account for 95
percent of electric capacity waiting [[link removed]] to
connect to grids, and utilities can pass through savings from the tax
credits for these projects to consumers. The Edison Electric
Institute, a utility trade association, estimates that the tax breaks
would save Americans $45 billion on their bills through 2031.

Another argument is that the tax credits can help protect against the
risk of volatile gas prices by encouraging alternatives, including
both renewable energy and longer-term technologies like nuclear or
geothermal power.

“If we do anything to impede increased supply, that will clearly
hurt the consumer,” said Ron Silvestri, a portfolio manager at
investment firm Neuberger Berman who specializes in power and energy
infrastructure. Mr. Silvestri called the House’s proposed rollbacks
of clean-energy tax credits a “worst-case scenario.”

Regardless of the fate of the energy tax credits, experts say rising
electricity prices will continue to roil policy debates. Some
industrial consumers are already urging restrictions
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L.N.G. exports. Other groups are pressing state regulators
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scrutinize utility spending on transmission upgrades, arguing that
companies often inflate costs.

“We’re facing a huge affordability crisis in America,” said
Charles Hua, a former Energy Department adviser who recently
founded PowerLines [[link removed]], a nonprofit
organization focused on modernizing utility regulations to cut power
bills. “This issue is not going away.”

Ivan Penn contributed reporting

_BRAD PLUMER is a New York Times reporter based in Washington,
covering technology and policy efforts to address global warming._

_He write about the policies and innovations that governments,
companies and people are pursuing to try to reduce greenhouse gas
emissions. I report on a wide range of energy technologies including
electric grids, renewable energy, nuclear power, geothermal, carbon
capture, hydrogen, electric vehicles and much more. I’m also
following the ups and downs of the changing energy landscape in the
United States._

_He has covered climate change and energy for more than a decade,
writing about everything from the science of melting ice sheets to the
economic effects of America’s fracking boom. I joined The Times in
2017 and was previously a reporter at Vox, The Washington Post and The
New Republic._

_REBECCA F. ELLIOT is a reporter covering energy for The New York
Times._

_She covers energy in the United States, with a focus on how the
industry is evolving in the push to curb climate-warming emissions.
I’m as interested in fossil-fuel giants as I am in battery makers
and the entrepreneurs seeking to bring new technologies to market. My
favorite business stories are about people._

_She joined The Times in 2024 from The Wall Street Journal, where I
was a business reporter for six years. I covered the leaders of the
American fracking boom and, later, Tesla and Elon Musk. I began my
career at The Houston Chronicle, where I wrote mostly about local
government and politics._

_Rebecca F. Elliot  grew up in New York City, graduated from Harvard
College and has lived in Houston and the San Francisco Bay Area._

* electric power
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* Budget Bill
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* Donald Trump
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* Tax Credit
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* environment
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* Data Centers
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* high gas prices
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* clean energy
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