Donald Trump is trying to turn high electricity prices into an edge at the ballot box.
On campaign stops, in the blazing summer heat, the former president has blamed Democrats for the rising cost of keeping the lights on and the air conditioners humming.
“By the end of my term, America will have the No. 1 lowest cost of energy and electricity,” Trump said in West Palm Beach, Florida, last month. “We’re going to get energy prices reduced within the first year to less than half of what they are right now, and that’s going to bring down inflation.”
At the Republican National Convention in Milwaukee this week, convention speakers blasted President Joe Biden for gasoline prices and the cost of electricity, driving at energy costs as a culprit for inflation across the economy. All of it highlights an uncomfortable reality for Democrats ahead of the November election. Electricity prices have risen by roughly 20 percent since late 2020, according to the U.S. Energy Information Administration, and show few signs of falling.
From April 2023 to April 2024, average retail electricity prices went up in the main battleground states, with Nevada and Wisconsin the exceptions. Conservatives have seized on power and gas prices to push back against climate policies in some states; in Washington state, a reliably Democratic stronghold, GOP megadonor and hedge fund executive Brian Heywood is bankrolling a ballot initiative to repeal the state’s cap-and-trade market for carbon emissions.
Trump is championing tax cuts for fossil fuel producers. And he’s pledging to leave the Paris climate agreement and to cut federal programs that support clean energy technology. Trump and his surrogates are vowing to cut electricity prices with a familiar slogan: “Drill, baby, drill.”
Perceptions and realities of rising energy prices fit neatly into a triple-barreled Republican critique of economic, energy and climate policies under Biden. Democratic spending is driving up the cost of living, from energy to groceries, GOP candidates are telling voters: “Inflation is killing our country. It is absolutely killing us,” Trump said during the June 27 presidential debate.
Republicans gathering in Wisconsin are making electricity — the pricing of which is arcane by any standard — a wedge issue against Democratic support for the nation’s transition from burning fossil fuels to carbon-free energy in the fight against climate change.
Energy economists say there is little correlation between any single White House policy and short-term electricity prices. The federal government plays almost no role in setting utility rates that determine how much we pay for power every month. That’s the job of state regulators. Presidents can open up more public land to drilling, but they don’t control the market price of natural gas, which is key to setting electricity prices.
“They could say we’re just going all in on fossil fuels and to hell with the carbon emissions. That would probably have some effect but relatively small,” said Severin Borenstein, a professor at the Haas School of Business at the University of California, Berkeley.
The U.S. economy is growing, and global supply chains are recovering after the Covid pandemic. But factors shaped by a president’s priorities can have longer-term effects on energy prices — and demand. Policies and tax breaks Biden signed into law are helping to spur U.S. manufacturing of solar panels, electric cars, batteries and other clean tech, driving up demand for electricity. Supercomputers needed to keep a roaring digital economy growing are demanding more power from regional electric grids.
Climate change itself is making electricity more expensive — from spending by West Coast utilities in response to wildfires to the piling up of costs in Texas and the Southeast in the wake of fiercer storms.
Power and 2024 politics
Americans drive to work. They drive cross-country for summer vacation. The “price at the pump” has long been a populist political rallying cry against any party that happens to be in office during periods of higher gasoline prices.
The AAA national average price of gasoline is $3.51 a gallon. But it’s stable and lower than recent peaks, and analysts say it’s not a front-burner issue for voters so far in this election cycle.
Economists and political experts are also skeptical that electricity prices — which are typically buried in dense utility bills or automatically paid by consumers — will influence Americans’ votes despite the spikes.
“People feel prices have gone up for everything, but the only things they remember are eggs and gasoline,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, who recently published a paper on energy burdens for low-income households.
In recent weeks, the U.S. has been wracked by extreme heat, and global climate scientists expect this summer to be the hottest in recorded history.
“Higher electric bills are going to start showing up later this month [and] next month,” Wolfe said. “Summer cooling will show up through October — especially if high temperatures continue into September.”
The Biden administration says inflation is slowing, but Americans say they’re still concerned about the state of the economy.
The Biden campaign did not respond to questions for this story.
Republicans and fossil fuel groups are hammering Democrats on the cost of electricity, despite energy trend-lines that predate Biden. The American Petroleum Institute, a lobbying powerhouse that represents oil and gas producers, is running advertisements this week that argue more fossil fuels will bring down energy costs.
The Republican National Committee platform points to “crippling restrictions” on energy producers. The document calls for the U.S. to be the “dominant energy producer in the world,” even as the nation produces volumes of crude oil and natural gas that are historically unprecedented for any country.
At a congressional hearing last month, a New York Republican grilled Deputy Energy Secretary David Turk on the cause of rising electricity prices. Rep. Brandon Williams pointed to a 23 percent rate hike proposed by National Grid, a big utility company serving upstate New York.
“This increase in rates demonstrates the pressing need for America to reassess its energy investment strategy,” Williams said in the hearing. “It’s clear that the bill is coming due for expensive and unrealistic progressive energy policies.”
Post-pandemic inflation was one reason National Grid cited. But the utility also said more money is needed for electric reliability, to bring on more renewable energy and support more electric vehicle charging. The state of New York has a 2040 target for achieving a zero-emissions power grid.
“What we’re actually seeing is the historic investments we’ve made in clean energy are actually having a decrease in prices across our country,” Turk responded. “We’re going to have $38 billion across our country in savings for folks on electricity bills.”
The Biden administration says tax credits enacted in the 2022 Inflation Reduction Act will lower the cost of generation for renewable producers and rates for customers. The law — Biden’s crowning climate policy win — also includes $9 billion in consumer rebates for energy efficiency appliances and housing retrofits, which can drive down utility bills.
Those rebates have not yet made it to homeowners and face an uncertain future if Trump wins the election.
Retail electricity prices rose just 3.5 percent in Trump’s term — a period that coincided with the Covid-19 pandemic. The U.S. has seen electricity prices rise by roughly 20 percent since Biden took office in January 2021, as the economy recovered from the pandemic. That’s the largest increase during any administration since George W. Bush’s second term, when prices rose 30 percent amid a surge in natural gas prices.
Supply and demand for natural gas play a pivotal role in forming electricity prices. Today, the United States is among the biggest gas producers in the world. The market price of gas hit close to record lows this year. And that’s kept costs for electricity in check.
Sprawling shale gas formations in Texas and Pennsylvania boomed more than a decade ago. That sent natural gas prices plummeting in 2012. They stayed low for years, before spiking in 2022 after Russia’s invasion of Ukraine. In early 2023, prices returned to pre-invasion lows.
Steve Cicala, an associate economics professor at Tufts University, said the cost of generating electricity also went up in 2022. “There certainly has been an increase in electricity prices,” Cicala said. “The period of high natural gas prices probably had a lot to do with it.”
Energy policy experts say much of the driver behind higher electricity rates today is climate change.
“Especially in the most recent couple of years of rate increases, my general sense is it is not clean energy or the infrastructure that’s required for clean energy,” said Brendan Pierpont, director of electricity modeling at Energy Innovation. “There are some really big drivers of those cost increases that have a lot more to do with fossil fuels and fossil fuel prices or climate impacts like the growing wildfire risk.”
Pierpont authored a recent report that argues “electricity price increases reflect economy-wide inflation,” adding that the “data does not support” allegations that clean energy is raising prices.
Wildfires are likely to cost electric utilities in the coming years. Victims who accuse utility Pacific Gas & Electric of failing to prevent aging lines and poles from starting fires agreed to a $13.5 billion legal settlement with PG&E in 2020. Pierpont said expensive wildlife insurance and mitigation programs like vegetation management, which can save lives, are partially to blame for the hikes.
Retail power prices for California’s nearly 40 million residents are among the highest in the country.
Subsidies and policies supporting the use of solar and wind power drives costs down, Cicala said. A larger component of people’s electricity bills in certain regions could be the cost of maintaining power lines and expanding regional transmission grids, he said.
Can a rate hike change votes?
Presidents generally have little influence on retail electricity rates or the cost of generating electricity. That means it’s difficult to pin the rise in power prices during the past three years on Biden, said Borenstein of UC-Berkeley and other economists
What’s more, while Trump blames Biden for the continued shutdown of coal-fired power plants, Borenstein said many utility decisions to pull the plug on coal plants were made during Trump’s presidency. Trump’s pledges to revive the coal sector fell woefully short but producers are still rallying around his bid, arguing that forecasts for increased demand warrant more coal production.
In 2023, natural gas provided more than 43 percent of the U.S. electricity grid, while coal topped 16 percent and renewables pulled in at more than 21 percent, according to the EIA.
Biden is on shaky ground in his reelection fight. After a debate performance in June that was widely panned as listless and ineffective, many Democrats are now openly urging him to drop out of the race. But those calls have softened in the wake of the assassination attempt against Trump.
To whatever degree Biden and Trump spar over energy inflation, the cost of turning the lights and AC on, or fueling up a car that runs on a battery, go far beyond today’s “price at the pump.” The often-ignored commodity known as electricity could see its prominence as an election issue rise in future years.
“Right now, in an extremely hot summer, if you’re adding 20-30 percent more electricity use because it’s so hot and it doesn’t cool off, that’s going to show up in a month’s time,” said Barry Rabe, a professor of public and environmental policy at the Gerald R. Ford School of Public Policy at the University of Michigan.
“Awareness of the sources of electricity [and] the reliability of electricity, which is a huge issue in my part of the Midwest, is likely to become greater.”
Reporter Tim Cama contributed to this story.