Introduction and summary
During his 2024 presidential campaign, Donald Trump promised to “cut energy costs in half” in one year, but his administration’s actions during the first months of his second term will almost certainly drive prices and bills further up.1 Electricity bills have been rising 31 percent faster than inflation for two decades,2 and now the U.S. Energy Information Administration (EIA) is forecasting that average residential electricity prices will reach a 10-year high3 in 2026. There are several reasons for this increase: investments in the country’s aging electric grids are not keeping up with the disasters of a changing climate, new clean energy sources are not being added quickly enough to keep up with new demands such as data centers, and the natural gas power plants that remain in place require costly fuel to operate. Natural gas prices were relatively low after domestic natural gas production substantially increased between 2009 and 2018,4 but they have begun to rise as more and more domestic supplies have been shipped overseas since liquefied natural gas (LNG) exports began in 2016. In the past year, consumer spending on natural gas has risen almost four times as fast as overall inflation.5 In most parts of the country at most times of day, the price of natural gas is what sets the wholesale price of electricity.6 Dependence on fossil fuels is costly, but unfortunately, the Trump administration is pursuing a policy agenda that will make natural gas and electricity more expensive for households and businesses alike. The oil and gas industry increases profit from the higher energy prices, but it is American families who will pay. Utility bills are rising, and the policies of the Trump administration are making it worse.
Utility bills are rising, and the policies of the Trump administration are making it worse.
This report details the following 10 actions the Trump administration is taking that will drive up electricity and utility costs:
Increasing electricity prices
- Imposing U.S. and reciprocal tariffs that drive up electricity import costs and raise prices across the supply chain.
- Expanding LNG exports, which raises domestic natural gas prices and exposes the U.S. electric market and households to global price spikes.
- Gutting the Federal Trade Commission (FTC), making it easier for utilities and energy companies to wield monopoly power.
Raising household costs
- Cutting Low-Income Home Energy Assistance Program (LIHEAP) funding and staff, which reduces support for low-income households to keep the lights on and access to essential heating and cooling.
- Weakening efficiency standards for appliances and electronics, leading to wasted energy and higher utility bills.
- Shifting the costs of new data centers to households by encouraging ratepayer subsidization of private data center buildout.
- Freezing clean energy investments and grants that Congress already allocated through the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA).
Reducing Americans’ access to the most affordable energy
- Restricting affordable energy deployment by blocking renewable development and electrification.
- Creating chaos for electric grid and clean energy investors and project development through erratic disruptions to the economy and higher capital costs.
- Slowing down permitting for energy projects by cutting government staff responsible for permitting.
Electricity and natural gas prices are rising
Americans across the country have experienced increased energy prices since 2005. As of March 2025, the average U.S. consumer pays, in nominal terms, 40 percent more for natural gas, 80 percent more for gasoline, and 93 percent more for electricity compared with January 2005.7 Residential electricity prices are continuing to rise and are likely to reach highs not seen in more than 10 years.8
American households across the country are likely to face further increases in their gas and electricity bills. In Akron, Ohio, Dynegy customers will experience an 86 percent increase starting in May 2025 in their monthly electric bills due to increased costs incurred by the utility.9 In New Jersey, customers will see their monthly electric bills increase up to 20 percent or by $28 starting in June 2025, owing in part to a supply crunch and increased demand from data center growth.10 Residential customers of Oregon’s largest natural gas utility, NW Natural, will see a 6.8 percent increase in their monthly gas bills starting in November 2025, which, along with previous increases, will result in a net increase of 50 percent in nominal terms in customers’ monthly bills since 2020.11
If Congress were to repeal the IRA’s clean energy tax credits as part of the budget reconciliation process, average household utility bills would increase by more than $110 per year by 2026.12 Repealing the credits would also increase bills for businesses by about 10 percent by 2026, with these increased costs passed on to consumers in the form of higher prices for goods and services.13 In the next year, Wyoming is estimated to see a nearly 30 percent increase in overall electricity prices; Kansas, Missouri, South Carolina, North Carolina, Washington, Illinois, and New Mexico are all projected to see overall electricity price increases between 14.8 percent and 24.4 percent.14
If Congress were to repeal the IRA’s clean energy tax credits as part of budget reconciliation, average household utility bills would increase by more than $110 per year by 2026.
10 Trump administration actions likely to drive up prices and costs for American households
With energy costs spiking across the country, President Trump is not likely to meet his campaign promise to cut energy costs in half.15Here are 10 Trump administration actions that will contribute to Americans’ increasing energy costs.
Increasing electricity prices
1. Imposing U.S. and reciprocal tariffs that drive up electricity import costs and raise prices across the supply chain
The Trump administration’s tariffs can make electricity more expensive in two ways: 1) by driving up the cost of fuels used to generate electricity, and 2) by tying up the supply chains for the equipment needed to run the grid. As of April 15, 2025, analysis from Yale University projects that the tariffs’ effect on energy commodities could result in 9.4 percent, 3.1 percent, and 0.1 percent increases in natural gas, oil, and electricity costs, respectively.16 Analysis for the state of Massachusetts shows that the tariffs could increase gas and heating oil prices by more than 20 cents per gallon.17 The tariffs could also increase electricity costs by increasing the costs domestic energy producers must pay for the equipment needed to run the grid; some industry participants estimate price increases of 8 percent to 9 percent for power transformers, 6 percent to 7 percent for switchgears, 3 percent to 4 percent for circuit breakers, and 6 percent to 7 percent for wires and cables.18 Utilities will pass these costs on to consumers in the form of higher rates for electricity. As data centers drive up electricity demand and compete with utilities for the same components for their own construction projects,19 household electricity prices could rise even higher.20
2. Expanding LNG exports, which raises domestic natural gas prices and exposes the U.S. electric market and households to global price spikes
The price of natural gas is the most significant factor driving electricity prices in many parts of the country, and the Trump administration is raising domestic prices by pushing supplies overseas. LNG exports have increased the influence of global energy markets and geopolitical conflicts on domestic energy prices. Between 2019 and 2024, residential natural gas prices increased by 13.3 percent after adjusting for inflation, largely from the integration of domestic and international energy markets through increased LNG exports, following nearly a decade of decreasing prices.21 The vulnerability of domestic prices was highlighted in 2022 when natural gas prices reached highs not seen since 2008 after the U.S. increased exports to Europe following Russia’s initial invasion of Ukraine.22
A U.S. EIA analysis found that higher LNG exports result in upward pressure on domestic natural gas prices. The analysis projected a 28 percent increase in wholesale natural gas prices by 2050 under a scenario with expedited LNG capacity expansion and increased LNG prices, compared with a reference case with restricted LNG expansion.23 Further studies from the U.S. Department of Energy (DOE) in 2024 found that the average household would experience up to a $122.54 annual increase in energy expenditures in 2050 as a result of increasing LNG exports from current levels.24
The DOE also found that households would experience increased costs of goods from increased energy costs passed through from manufacturers. Despite the clear effect that increasing LNG exports has on Americans’ wallets, the Trump administration has lifted the pause on LNG export project approvals, approved multiple LNG export projects, prioritized the development of LNG in Alaska, and removed barriers for LNG expansion.25
3. Gutting the FTC, making it easier for utilities and energy companies to wield monopoly power
Large corporations are able to warp competitive forces through several avenues, and the oil and gas industry garners enormous profits and political power: The five largest oil and gas companies made more than $100 billion in profits in 2024 and spent more than $440 million to influence the 2024 election.26 Yet the public wants lower prices and fair competition, and public institutions are set up to prevent unfair practices by large corporations. In particular, the FTC plays a key role in protecting consumers with its dual mandates to protect competition and consumers from unfair and deceptive practices. For example, in 2024, the FTC took action to prevent Chevron Corp. from acquiring competitor Hess Corporation after alleging that Hess CEO John B. Hess encouraged OPEC to take actions that would raise oil prices.27
More oversight is needed to help lower prices for consumers, but President Trump is undermining the oversight currently in place. This is especially the case at the FTC, where the Trump administration is unlawfully firing commissioners and making decisions that will result in an FTC that is unlikely to oppose energy mergers or investigate utilities’ anticompetitive behavior or deceptive claims on energy efficiency—all of which drive up energy costs.28 These firings weaken the FTC and make it unlikely to oppose mergers and investigate claims.
Raising household costs
4. Cutting LIHEAP funding and staff, which reduces support for low-income households to keep the lights on and access to essential heating and cooling
Households are already seeing higher electricity bills as a result of this administration’s actions. In Alabama, more than 200 utility customers saw a $100 increase in their energy bills due to the freeze in the IIJA’s allocation for LIHEAP.29 Americans who directly receive assistance will not be the only ones affected. In addition to heating and cooling assistance, LIHEAP funds can be used to cover utility arrearages, helping families pay overdue bills, but if remaining program funds are not obligated, costs could be redistributed onto other ratepayers.30 This could result in higher energy bills for American households—regardless of whether they participate in LIHEAP—and more frequent utility shut-offs.31
Past cuts to LIHEAP have already proved to have severe effects on energy affordability.32 When Congress reduced LIHEAP funding between fiscal year 24 and fiscal year 23, utility arrearages, which had been in decline, rose by 8.4 percent, amounting to $17.4 billion in debt that was spread across 17.4 million U.S. households.33 Together, these energy-burdened households represent more than three times the number of households LIHEAP served during the same period.34 Future LIHEAP funding also lies in the balance: On April 2, 2025, the Trump administration laid off all federal staff administering the LIHEAP program, putting in jeopardy timely distribution of the remaining funding to states and households—even though LIHEAP funding for fiscal year 2025 was already approved by Congress. This action threatens to paralyze the program.35
5. Weakening efficiency standards for appliances and electronics, leading to wasted energy and higher utility bills
Weakening and reversing the DOE’s newest efficiency standards for home appliances and equipment wastes energy in American households and prevents much-needed savings on energy bills.36 Without updated standards for home equipment and systems, annual utility bills will increase by an average of $107 for U.S. households and $2 billion for U.S. businesses, causing the average household to lose out on an average $2,000 in cumulative savings over the next two decades.37 Reversing these standards would also waste about 20 billion gallons of water every year and increase emissions of harmful pollutants such as nitrogen oxides and sulfur dioxides by 11,700 tons and 5,100 tons, respectively; this could increase the risk of cancer, asthma, heart problems, and early death.38 The Trump administration has begun to withdraw and postpone multiple appliance energy efficiency rules that will only hurt consumers’ wallets.39
6. Shifting the costs of new data centers to households by encouraging ratepayer subsidization of private data center buildout
U.S. electricity demand is poised to grow exponentially over the next five years, primarily from data centers, with forecasts ranging from 65 GW to more than 90 GW.40 President Trump has signed executive orders removing barriers for artificial intelligence and extending the life and expanding the use of coal plants to power data centers.41However, the unconstrained development of data centers and the power plants that power them may lead to large costs that could be shouldered by American ratepayers. In northern Virginia, the largest data center market in the world, unconstrained data center growth could result in demand tripling by 2040, which could increase monthly electricity bills by $37 for a typical residential customer of Dominion Energy, the region’s electric utility.42 Growth in data centers will require new infrastructure, including new energy generation and transmission lines, the costs of which will be unevenly spread out to and paid for by the public.43 The main beneficiaries from this administration’s actions are companies such as Meta, with its planned data center in Louisiana, and Elon Musk’s xAI, which has an operational data center in Tennessee—both of which require large-scale investment in electricity generation at the ratepayers’ expense.44 In addition, xAI reportedly skirted around regulations and permitting requirements to operate their data centers, leaving Memphis residents facing additional health burdens on top of their higher energy costs.45
President Trump’s action to expand the use of coal power plants to meet the demand for data centers will also raise costs for consumers since aging coal plants are expensive to operate,46 which is a major reason that their generating capacity shrunk from 50 percent at the start of the century to 15.1 percent in 2024.47 Furthermore, extending the life of coal power plants puts unfair financial burdens on customers; for example, two coal plants in Maryland that delayed retirement by four years as part of an inefficient and costly effort to maintain grid reliability.48 The administration’s actions to boost data centers, especially through the use of coal power plants, will shift the costs to rate-paying Americans.
7. Freezing clean energy investments and grants that Congress already allocated through the IIJA and the IRA
The IIJA and the IRA both help revitalize the U.S. energy system through investments in infrastructure, home energy improvements, and clean energy projects, all of which lead to energy savings. These investments save Americans money: The Home Energy Rebates program would save households up to $1 billion annually,49 the Weatherization Assistance Program would save individual households $372 on average annually,50 and the recently unfrozen Solar for All program51 would generate more than $350 million in annual savings on electric bills for overburdened households.52 But the Trump administration has paused or undermined many of these programs and is calling on Congress to repeal clean energy incentives,53 which Energy Innovation estimates would increase cumulative household energy costs by $32 billion between 2025 and 2035.54
Reducing Americans’ access to the most affordable energy
8. Restricting affordable energy deployment by blocking renewable development and electrification
In the face of increasing electricity demand and natural gas supply chain and construction delays,55 the Trump administration’s executive orders are undermining the solution for quick and cheap power from clean energy sources.56 Solar, wind, and storage are the most affordable sources of energy,57 but the Trump administration is slowing their deployment. The administration excluded solar and wind from the definition of “energy” in one executive order while prioritizing the use of fossil fuels in another.58 A third executive order blocked federal approvals for all wind power projects, effectively halting permitting for all major offshore wind projects and possibly more than half of onshore wind projects.59 The administration also functionally froze all offshore wind leasing in federal waters and temporarily paused approvals for solar power projects on public lands for 60 days.60 Even though that pause was temporary, it had major ramifications alongside other anti-renewables policies.61
9. Creating chaos for electric grid and clean energy investors and project development through erratic disruptions to the economy and higher capital costs
The Trump administration’s policies—including tariffs, freezing federal funds, and threatening clean energy investments—are causing chaos for investors. Uncertainty and high interest rates are particularly deadly for clean energy projects. Renewable energy developers need loans and capital to cover significant up-front costs and often sign contracts to deliver electricity at a certain price ahead of construction.62 As a result, solar and wind projects are particularly vulnerable to inflation, interest rates, and supply cost increases. Multiple solar and wind projects have already been canceled since Trump took office, reducing Americans’ access to affordable energy.63
10. Slowing down permitting for energy projects by cutting government staff responsible for permitting
The Trump administration has weaponized permitting against renewables projects.64 In addition to blocking permitting of solar and wind projects, the administration has rescinded the Council of Environmental Quality’s ability to implement the National Environmental Protection Act (NEPA).65 This means that agencies will have to implement NEPA independently, in an uncoordinated fashion, which will increase inconsistency, waste resources, and exacerbate delays. At the same time, the administration has put permitting staff across the country on administrative leave, likely leading to further increased delays.66 In addition, short staffing agencies could result in haphazardly completed reviews that may not stand up to legal challenges—increasing delays even more and further restricting Americans’ access to affordable energy.
Conclusion
The American public wants clean and affordable energy, but the oil and gas industry benefits from high prices, which drive higher profits and investment67 The Trump administration seems more intent on meeting the fossil fuel industry’s needs than on meeting the needs of everyday Americans. In order to break its dependence on fossil fuels and industry market power, the United States needs more policies that democratize energy production, promote competition, and maximize deployment of affordable, clean power. Unfortunately, the Trump administration’s policies are poised to slow down clean energy and efficiency and give more power to the oil and gas industry, with the result of higher electricity prices for Americans.
Acknowledgments
The authors would like to thank Alia Hidayat, Mariel Lutz, Leo Banks, Jasia Smith, Trevor Higgins, Adam Conner, Jamie Friedman, Colin Seeberger, Ryan Mulholland, Natalie Baker, Meghan Miller, and Audrey Juarez of the Center for American Progress for their contributions to this report.