Americans Just Got Scammed on Their Electricity Bills

At a campaign rally in August 2024, then-candidate President Donald Trump promised that “under my administration, we will be slashing energy and electricity prices by half within 12 months.”

But six months into President Trump’s second term, he signed the One Big Beautiful Bill Act (OBBBA), which thoroughly and systematically undermines future clean energy projects and risks hundreds of billions in investments that have already been made in the sector. With this, energy and electricity prices are going to explode.

The bill significantly rolls back clean energy tax credits expanded under the 2022 Inflation Reduction Act (IRA), which supported energy sources needed to meet growing demand while helping Americans save on their energy bills. Before this bill, the IRA was set to grow the U.S. economy by $1.9 trillion, create 13.7 million jobs over ten years, and add $846 billion to household income. The new law, which targets energy sources like solar PV and wind that were poised to meet demand, is coupled with a national energy strategy that demands investment in nonrenewable energy sources that are actually more expensive for consumers. Americans’ electricity bills will reflect this double punch.

The bill imposes particularly harsh credit phaseouts on solar and wind projects and implements new rules about the origin of material components across the clean technology sector. It directly targets a booming industry that would help the U.S. meet its growing electricity needs. Without them, the U.S. will not be prepared for increasing demand.

Between January and April of this year, 96% of new utility-scale electricity generating capacity was from solar and wind, and a January report predicted that solar would drive U.S. power generation over the next two years. If the Administration and Congressional Republicans had allowed pre-existing funding and investments in renewables to come to fruition, we would be far more prepared to meet exploding electricity demand.

U.S. electricity demand is expected to grow by almost 16% over the next 5 years, a massive increase from the 2001 and 2024 period, when the U.S. electricity consumption grew 0.5% annually. Increasing demand is driven by growth in large data centers used to power artificial intelligence, reshoring of industry, and broad-based electrification.

Even without the new law, residential electricity rates were set to rise 15% to 40% by 2030 and double by 2050. When demand rises, so do electricity prices as more expensive generation sources are turned on to meet the increased load, a cost that is passed to consumers. The grid needs to be adding an estimated 80 GW of capacity annually over the next 20 years to meet demand, but the new law is already set to kill 81 gigawatts of potential new generation capacity through 2033. Through the rapid phaseout of IRA tax credits, the bill will impact electricity customers in every state. A NERA analysis found that customers in some states may see their energy bills rise as much as 30% by 2029.

The evidence is clear: phasing out credits that have already supported clean and cheap electricity generation will raise customer utility bills, on top of the increase in bills already expected from growing demand.

The White House plans to meet growing demand by doubling down on fossil fuels. The National Energy Dominance Council, which was formed this year, includes oil, gas, pipeline, mining, critical minerals, electric grid, and coal experts, but no solar experts. They plan to keep aging fossil-fueled power plants online past scheduled closures, even when grid operators, utilities, and state public utility commissions disagree. Fossil-fueled generation has higher operating and maintenance costs, which utilities will shift to consumers. This is already happening in Montana, where utility NorthWestern Energy increased consumer electricity rates by $204 a year without review in order to cover costs largely related to the construction of a new natural gas plant. 

Energy will need to come from somewhere, and solar PV and wind are the cheapest options for new generation. They also have lower operating costs than fossil fuel alternatives, but the Republican energy agenda excludes these sources.

The people who will pay for this new energy strategy are Americans just trying to keep their lights on, literally. Purposefully levying higher electricity bills on every consumer by investing in outdated energy sources with higher costs, while systematically undermining the cheaper alternatives, is a scam. Americans everywhere just got scammed on their electricity bills.

Elea Castiglione

Kleinman Center Research Assistant

Elea Castiglione is an undergraduate student studying philosophy, politics, & economics with a concentration in public policy and governance. Castiglione is a 2025 Undergraduate Student Fellow and a research assistant with the Center.