During his presidential campaign, President Donald Trump promised to cut energy prices in half within 12 months of taking office. However, in 2025, electricity prices rose at 2.5 times the rate of overall inflation and are now one of the fastest drivers of inflation.* Furthermore, millions of customers across the country are either already paying more for their electricity or will see higher prices in 2026 and beyond. As concerns around utility bill affordability continue to grow, the Trump administration has created an environment that increases economic uncertainty through its use of tariffs and restricts federal funds for necessary grid investments, ultimately resulting in increased costs for consumers.
Michigan households are projected to pay an additional $160 per year on their energy bills by 2030 due to the Big Beautiful Bill, which congressional Republicans passed and President Trump signed into law last summer. In addition, DTE Electric Co. and Consumers Energy, which together serve nearly 4.2 million, or 82 percent of the state’s electric utility customers, are seeking approval for large annual rate increases that would further increase electric bills this year. DTE’s request would yield $574.1 million in additional revenue and seeks surcharges in 2027, 2028, and 2029 that would go into effect as soon as February 24, 2026, while Consumers Energy’s request would yield $436 million in additional revenue and would go into effect as soon as May 1, 2026. According to Center for American Progress research and calculations, DTE’s and Consumers’ customers together will pay an additional $3 billion across all sectors through 2028, and an additional $162 and $168 per year, respectively, on average residential electricity bills if the requests are approved.** In their applications, the two companies cited several federal policies and administrative actions that currently and will continue to contribute to higher costs for both the companies and their customers.
Uncertain economic conditions fueled by tariffs increase costs for utilities
Utilities are a capital-intensive industry and sensitive to changing market conditions including high inflation and interest rates, which increase costs and influence the utilities’ requested return on equity, meaning profit for shareholders. In testimonies before the Michigan Public Service Commission, representatives for both DTE and Consumers Energy said that President Trump’s tariff policies could lead to higher inflation and interest rates, with DTE further mentioning that federal workforce reductions and lower government spending are invoking fears of an economic slowdown. DTE requested a return on equity of 10.75 percent, 0.25 percent higher than DTE’s request in its prior rate case. Utilities across the country, including in Wisconsin and Arizona, are experiencing similar impacts from uncertain economic conditions.
House Republicans’ efforts to protect President Trump’s tariffs
In an attempt to preempt efforts to overturn President Trump’s tariffs on Canada, House Republicans passed a rule in April 2025 to strip privileges providing expedited consideration to bills challenging the so-called emergency tariffs authority, thereby preventing the U.S. House from joining the U.S. Senate in voting to end the Canada tariffs. The rule change expired January 31, 2026, restoring expedited consideration to bills that would terminate the national emergency. After the House rejected a last attempt to restore the tariff protections, the House voted, with the support of just six Republicans, to end the Canada tariffs in a 219–211 vote on February 11, 2026. The Michigan delegation split along party lines.
The effect of the new presidential administration on the economy is uncertain, and higher tariffs could complicate investor expectations for inflation and interest rates.
Jennifer E. Nelson, vice president, Concentric Energy Advisors on behalf of DTE Electric Co., from testimony on April 24, 2025
Restricted federal funding for grid investments
The Infrastructure Investment and Jobs Act (IIJA) appropriated billions of dollars for electric infrastructure investment. DTE was approved for a $23 million U.S. Department of Energy (DOE) grant through IIJA to fund two projects that would enhance grid resilience during extreme weather events using microgrids in west Detroit and Port Austin, Michigan. The two projects were expected to reduce power outages by up to 80 percent and decrease outage durations by up to 30 percent when extreme weather events occurred in the areas served by the microgrids. However, the Trump administration paused all federal grant negotiations before DTE could finalize details for the program, resulting in the company’s decision to suspend any efforts to secure federal grants that would have allowed the utility to make investments to the electric grid at a reduced cost to its customers. The company further mentioned that even if grants were resumed, changes in project funding, scope, and oversight could ultimately affect the company’s customers. Similarly, Consumers Energy saw DOE cancel two of the company’s IIJA renewable energy and carbon sequestration grants, with funding for several other grants included in Consumers’ rate filing pending resolution and negotiations.
DTE also received a conditional commitment for a low-interest loan guarantee of up to $7.17 billion through the Inflation Reduction Act’s Energy Infrastructure Reinvestment Financing program to fund multiple projects, including a battery storage facility, aimed at providing its customers with affordable clean energy. The loan was expected to provide DTE’s customers significant interest savings through 2055. However, with the change in administration and a rebrand of the program to “Energy Dominance Financing” to support coal, oil, and gas power plants and recent loan terminations, it is unclear whether DTE will reach a financial close on the loan.
Conclusion
Separate from DTE’s and Consumers’ proposed rate hikes, Michigan utility customers are already projected to pay an additional $160 per year on their energy bills by 2030 and $320 per year on their energy bills by 2035 due to the Big Beautiful Bill. The Trump administration’s approach to international trade policy and federal energy policy is creating further harm for utility customers in Michigan. Despite President Trump’s promises on the campaign trail to lower costs, the administration’s actions will ensure that electricity prices continue to rise in Michigan and beyond.
* Using U.S. Bureau of Labor Statistics data, the increase in overall consumer price index (CPI) between December 2024 and December 2025 was 2.65 percent while the increase in electricity CPI was 6.7 percent, meaning the latter increased 2.5 times over the former.
** According to CAP’s Electric and Natural Gas Utility Tracker as of January 26, 2026. The tracker is not comprehensive and does not include every utility that is currently seeking an increase in utility rates.