The Trump administration is scrambling to ensure there’s enough electricity to power new data centers and stem rising utility bills — even as it dismantles some critical programs designed to help solve the problem.
Many energy experts say increasing efficiency is a key solution as demand soars with the artificial intelligence boom. But President Donald Trump has taken an ax to federal efficiency programs since he took office in January.
The Department of Energy has scrapped its energy efficiency office and is rolling back regulations in its appliance standard program, which forces manufacturers to increase efficiency levels for household products and industrial equipment. The agency is also proposing to eliminate the Weatherization Assistance Program, a half-century-old initiative that subsidizes equipment efficiency upgrades for low-income households.
EPA is waffling on whether to continue Energy Star, a program that certifies efficient household equipment and buildings. And Trump’s One Big Beautiful Bill Act quickened the expiration of tax credits for residential energy efficient upgrades.
Those programs are designed to reduce electricity use — and monthly utility bills.
“Energy intensive industries are starting to increase energy demand in this country. Energy prices are increasing, and we’re also at a point where new supply is constrained,” said Mark Kresowik, senior policy director at the American Council for an Energy-Efficient Economy (ACEEE). “If the Trump administration succeeds in rolling back appliance standards and building codes and all the things it’s trying to do, costs are going to go up.”
Congress has so far pushed back against some of the administration’s biggest proposed cuts for efficiency programs, but advocates fear funding reductions. Already, U.S. progress on energy efficiency is approaching stagnation, according to the International Energy Agency, while ACEEE has knocked the U.S. down a peg in a recent global ranking on efficiency.
DOE did not respond to a request for comment.
The Trump administration has prioritized new electricity generation, pursuing “drill, baby, drill” policies to boost oil and gas production and encouraging more nuclear power plant construction. It’s also using emergency orders to keep fossil fuel plants running past their planned retirement dates.
“Energy addition is the only way we will have enough electricity to lower prices and power AI in the U.S.,” Energy Secretary Chris Wright said Saturday.
But some say efficiency gains achieve similar goals.
“Not using megawatts of power is just as important as building new megawatts, and it’s quicker, cheaper, and easier,” said Jennifer Schafer, president of the Cascade Associates consultancy and a former Republican staffer on Capitol Hill. “This should be a bipartisan issue. It’s not something that should be politicized, and it has. That’s a problem.”
“If we had not been investing in efficiency since the late 1970s, we would use twice as much energy today,” she said.
Will Atkinson, senior associate at clean energy think tank RMI, said energy efficiency is necessary to cut costs.
“We need efficiency if we’re trying to promote affordability for years to come, especially with load growth,” he said.
Changing politics
According to the U.S. Energy Information Administration, commercial and industrial electricity rates nationwide increased more than 6 percent in September over the same month last year. Residential rates are up 7.4 percent.
Many factors contribute to the spike in prices. But experts say new eye-popping power demands from artificial intelligence data centers will likely increase bills.
Efficiency gains in the AI sector could reduce demand forecasts. The industry also argues that AI will facilitate efficiency in other industries, such as through smart grid technologies and virtual power plants.
New analysis from the AnnDyl Policy Group, which has lobbied for efficiency legislation, suggests data centers could boost local buy-in by funding efficiency upgrades for households in data center communities. Those upgrades could include smart thermostats, heat pumps and insulation.
“Data center owners and operators must deploy solutions that make them a contributing member of the community,” said the analysis.
Federal efficiency programs have long been considered bipartisan priorities. But many Republicans say efficiency regulations ratchet up costs for appliances and deprive Americans of consumer choice. A Biden administration attempt to regulate gas stove efficiency, for instance, sparked a heated culture war, leading the Biden team to scale back the regulation.
Meanwhile, lawmakers who have championed efficiency, like Jeanne Shaheen (D-N.H.) and Thom Tillis (R-N.C.), plan to retire next Congress.
In the absence of federal action, Democrats in states like Virginia are prioritizing new energy efficiency legislation. A bill in Virginia that would encourage utilities to make efficiency upgrades in millions of homes is poised for consideration next year.
Businesses also often view efficiency improvements as profitable.
“Energy, for the consumer, is really one of the top five spends in any budget and probably the least understood,” said Kevin Madden, a former Honeywell employee who now runs Ecosave, a firm that helps design energy efficient businesses. “The quickest way to get at some of the supply related issues is demand management.”
At last month’s U.N. climate summit in Brazil — which the Trump administration skipped — 180 organizations and companies sent a letter to summit leadership to affirm their commitments to energy efficiency.
“Whether by optimizing energy use with AI, improving energy reliability and resilience by upgrading aging infrastructure, or adding more efficient cooling and heating to improve worker productivity and indoor air quality, U.S. businesses and organizations remain committed to investing in a sustainable future with energy efficiency as the ‘first fuel,’” said the groups, which included the Chamber of Commerce and Business Council for Sustainable Energy.
