The Patriot Post® · The Inflationary Bite of Electric Bills

Last winter, the complaint of surging electric bills that people were having difficulty keeping up with was prevalent in the Northeast, including this writer’s home state of Delaware, leading to demands that state and local governments do something about the problem. Unfortunately, they just shrugged their shoulders and blamed the cold weather.

But with a chilly start to the winter already on tap for several areas of the country, including a significant winter storm over Thanksgiving weekend in the Midwest, the concern has returned.

While The New York Times graphically illustrated in October that electricity prices have risen more slowly in some regions of the country — particularly those where wind energy is readily available — most populated areas have seen significant increases, even when adjusted for inflation. For example, California has jumped 8.2 cents per kilowatt hour above inflation, while Maine has surged a nickel per.

It’s led to a situation that tripped up Senator Amy Klobuchar, who (surely unintentionally) showed what Bidenflation and the Green New Deal did to a number of people’s wallets as far as electricity bills were concerned. “Under President Trump, electricity prices are surging — up 11%!” she posted … with a chart showing that they’re up 28% since Joe Biden’s Inflation Reduction Act.

If you believe the experts, inflationary pressure on electric rates comes from several factors: one is the huge demand created by newly built data centers, which are already taxing the system in select locations and driving prospective operators to re-open recently closed power plants such as Three Mile Island, which was put out of service in 2019.

Another issue being blamed is the high price of natural gas, which is in plentiful supply domestically but also faces growing overseas demand as LNG exports have increased sevenfold over the last seven years. Setting aside the geopolitical advantages of being an energy exporter, particularly to Europe, these exports do affect prices.

Forbes Senior Contributor Robert Rapier also states that an aging delivery infrastructure takes a share of the blame, noting, “More than 70% of transmission lines and transformers are over 30 years old. Replacing and upgrading them is both essential and expensive.” Meanwhile, shortages of these critical items are bogging down the replacement schedule and increasing costs.

Finally, we have the expanded use of solar and wind power, which seems counterintuitive — after all, the base resources are free — until one realizes that their capricious nature requires a backup power source. “Solar and wind are only cheap when the sun is shining and the wind blowing,” noted Bjorn Lomborg at the Financial Post. “At all other times, their cost is infinite: no matter how much you pay, you can’t get any. But modern societies need around-the-clock power. The intermittency of solar and wind means backup is required, often delivered by fossil fuels. Which means citizens end up paying for two power systems: both renewables and their backups.”

Proponents of renewables point to advances in battery capability to address the reliability issue. However, it’s still a technology in its relative infancy, and as energy expert Dr. Jonathan Lesser points out, “Storage batteries to correct for wind’s and solar’s inherent intermittency are too costly. Moreover, the quantities of storage that would be required are unrealistic and likely physically impossible to develop.”

Regardless of which factor gets the most blame, the reality is that high electricity prices are here to stay unless these issues are addressed. Some of these changes are already underway: witness the One Big Beautiful Bill accelerating the phaseout of tax provisions that investors in renewable energy projects counted on to subsidize their projects, meaning the perceived cost advantages of solar and wind energy become significantly less. Increased investment in necessary energy infrastructure, as well as a push to expand domestic energy exploration and extraction, spurred by the Trump administration, will also help curb costs down the road.

The biggest assist, though, can come from state governments. A surprising number of states, including “red” states such as Kansas, Missouri, Montana, Ohio, and Texas, have renewable portfolio standards that, in many cases, have been on the books for over two decades and propped up the unreliable solar and wind industries. Repealing those laws and encouraging utilities to invest in the carbon-free energy of nuclear power, with natural gas as a relatively clean-burning bridge fuel compared to the coal and oil burning of past generations, would serve both masters. Nuclear plants are reliable enough to still power 18% of our overall needs, despite many of them being 50 to 60 years old, and only a handful have been completed this century. Moreover, there is growing interest in small modular nuclear reactors, which could enable simpler construction and operation than standard nuclear plants.

Rising electricity prices don’t have to be a burden anymore, but it will take some foresight from our business and political leaders to address the problem in the coming years.