Households will pay more for energy because of Trump's policy changes,
think tank says
[October 02, 2026] By
JENNIFER McDERMOTT
Households in the contiguous United States will pay thousands of dollars
more for energy through 2040 because of federal policy changes since
President Donald Trump returned to office, according to modeling
released Friday by a nonpartisan think tank.
The Energy Innovation analysis found that households will pay an average
of $6,500 more for energy, cumulatively through 2040. In five states,
households will pay roughly $9,000 more: Oregon, Mississippi, South
Dakota, Virginia and Wyoming.
The California-based think tank said there will be more demand for
natural gas for electricity because the administration is canceling new
clean energy projects and there will be more demand for gasoline for
transportation because Trump and Congress are revoking policies that
encouraged or created incentives for more efficient and lower-emissions
vehicles. Higher demand drives prices up.
Electricity bills are already rising faster than inflation in much of
the U.S., which is being blamed in some areas on demand from data
centers. The Iran war has sent oil and gasoline prices sharply higher,
too.
Contrarily, Trump has said his administration's energy policies will
make bills more affordable for families and businesses. White House
spokeswoman Taylor Rogers said Wednesday that lowering electricity
prices remains a top priority and Trump is unleashing reliable energy
like coal and natural gas to reverse the “catastrophic damage” Democrats
did to the power grid by ramping up clean energy. A 2025 Department of
Energy report, mandated by Trump, warned of increasing blackouts if the
U.S. continued closing coal and natural gas plants.
“Joe Biden created a grid crisis; President Trump is fixing it,” Rogers
wrote in an email. “If the Democrats had their way, these costly and
unreliable renewable energy projects would still be failing our grid and
our communities.”
The Republican president prioritizes fossil fuels to produce
electricity, unlike Biden, who saw clean energy as a climate solution.
Analysis examined impact on states solely from federal policy changes
It focused on the sweeping package of tax breaks that slashed funding
for clean energy tax credits, known as the One Big Beautiful Bill, Trump
signed; environmental rollbacks, including clean air and power plant
rules and the revocation of a scientific finding that underpinned the
U.S. fight against climate change; the loosening of fuel economy
standards and blocking of California’s novel rule banning the sale of
new gas-powered cars by 2035; and federal actions to stop wind, solar
and hydrogen projects.
These changes will result in annual household energy costs rising in
every state in the contiguous U.S., plus job losses in 47 of 48 states
and losses to the gross domestic product in 46 states, Energy Innovation
said. It's projecting 37,000 additional premature deaths from air
pollution, $72 billion in additional healthcare costs and more than 9
billion tons of additional carbon pollution because of the environmental
rollbacks. The analysis did not include Alaska or Hawaii because key
federal data is not available for those two states, said Robbie Orvis,
senior director for modeling and analysis.
Looking at the metrics, Orvis was hard-pressed to find a silver lining.
“Across pretty much every state, things are worse. The outlook now is
worse for states and the affordability crisis will be worse because of
the combined set of policies,” he said.
Climate Justice Alliance legislative director Mar Zepeda said her
Washington, D.C., electric bill increased $200 in the past month. Zepeda
said electricity demands from data centers are increasing energy rates,
and federal “affordability” policies only exacerbate this.
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A natural gas meter operates Jan. 22, 2025, in Portland, Ore. (AP
Photo/Jenny Kane, File)
 “They may call it affordability, but
affordable for whom and at what cost? Not for regular people,”
Zepeda said in an email.
White House says the think tank is partisan
Rogers said it is “irresponsible” to classify Energy Innovation as
nonpartisan because its employees have donated to Democrats and
worked with Democrats on climate policy.
Spokesman Silvio Marcacci said they work with policymakers who want
to cut emissions and lower bills, regardless of party. He said
multiple states led by Republicans have used their tool designed to
model policies affecting energy use and emissions. Much of their
data comes from government sources, including the Energy Information
Administration.
Rogers also said states led by Democrats that have embraced
aggressive renewable mandates see higher energy costs, notably
California and New York. She said this proves Republican policies
are working. The conservative think tank, Institute for Energy
Research, said in December that blue states have high rates.
However, in the Energy Innovation analysis, three of the five states
facing the highest costs have Republican governors, and states that
voted for Trump in 2024 will pay an average of $7,000 more in energy
spending cumulatively per household, versus $5,800 on average per
household in states that voted for Kamala Harris. Its research has
found that states with high levels of wind and solar generation,
including Republican-led Iowa and Oklahoma, have experienced the
lowest rate increases.
The average price residential customers pay for electricity
increased over the course of Biden's term and has continued to rise
since Trump returned to office, according to EIA data. Customers
paid an average of about 12.6 cents per kilowatt-hour in January
2021 when Biden took office. In January 2025, when Trump returned to
office, that price stood at nearly 16 cents per kilowatt-hour. It
was 17.45 cents in January 2026 and 18.31 cents in July.
Oregon households’ annual energy spending slated to increase the
most
The modeling projects federal policy changes will increase annual
energy spending in Oregon by $840 per household in 2035 and $1,200
per household in 2040, with a cumulative $9,300 increase from 2026
to 2040 — the highest of any state.
The Oregon Citizens’ Utility Board advocates for residential utility
customers. Executive Director Bob Jenks called those numbers
“frightening” because Oregon already has an energy affordability
problem. He cited steep rate increases as utilities make upgrades
and data centers use more power.
As costs rise, Jenks expects utilities to disconnect more households
because people won't be able to afford their bills.
Jenks said wind and solar are essential for affordable electricity
in Oregon, and he wants the federal government to partner with
states to develop the energy they need.
“We're trying to optimize among the resource options we have, and
they’re trying to take things away and raise the costs,” he said.
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