The ongoing discussion about the reasons for rising electricity prices has reached a fever pitch, with various parties pointing fingers. Some attribute the hike to President Trump’s significant legislation that cuts subsidies for cheaper renewable energy sources, while others argue that the increasing demand for electricity—driven largely by AI—plays a role. Then there are those who cite inflation. Yet, upon closer inspection, these claims don’t hold up well.
This blame game, often fueled by a supportive media, seems primarily about gaining political leverage. A prime example can be seen in California’s Governor Gavin Newsom, who recently visited Belem, Brazil. There, he mingled with global elites at the COP30 climate conference and took the opportunity to criticize the Trump administration for not attending, implying that such decisions are, in a way, ceding the future to China. It’s a bold claim, isn’t it? He says California is leading the charge toward a clean energy future, even as many challenges loom large.
Despite Newsom’s assertions, California now boasts the second-highest electricity prices in the U.S., just behind Hawaii. A report by Dr. Jonathan A. Lesser reveals that California has seen electricity rates increase by 127% since 2010—leading the nation. The inconvenient truth? Newsom might not want voters to realize just how costly “green” energy can be. Guaranteeing power when wind and solar aren’t viable options is quite pricey.
In fact, Lesser points out that these factors contribute significantly to soaring electricity costs. The Biden administration’s aggressive promotion of subsidized renewables, along with California’s policies, has disrupted energy grids. Consumers are left to foot the bill for the unreliable “green” sources, which need backup from more stable gas power and costly batteries.
Moreover, the Energy Information Administration (EIA) indicates a nationwide average increase in residential electricity prices by around 63% from early 2010 to mid-2025. However, this rise isn’t uniform across the board. States like California and Massachusetts now face some of the highest rates, surpassing 30 cents per kilowatt-hour in specific locales.
Critics have suggested that data centers, the energy-hungry facilities powering AI and cloud computing, may be to blame. While it’s true they require significant power, rates in Virginia—home to many such centers—are below the national average. So, if data centers are the culprits, why isn’t Virginia experiencing the same level of price hikes as California?
A recent analysis by the International Renewable Energy Agency highlights falling renewable energy prices, but Lesser contends that this is a misleading simplification. Subsidies like the federal Production Tax Credit create market distortions, pushing prices down artificially and discouraging the construction of reliable energy sources.
Interestingly, between 2010 and 2024, there was a 16% increase in electricity capacity, but retail sales only went up 5%. While intermittent wind and solar energy grew tremendously, traditional power sources like coal and gas saw significant declines. This shift raises questions about the grid’s reliability going forward.
Looking ahead, projections indicate that over 1,900 megawatts of fossil fuel power will be decommissioned soon, with an additional 12,600 megawatts expected to shut down by 2026. The concern is what will fill this vacuum—more wind and solar subsidies, but will they be adequate?
States like New Jersey and New York have even shuttered reliable energy plants, like the Oyster Creek nuclear power facility. Current EPA rules are working to limit coal plants as well. Meanwhile, California pushes for zero-emission vehicles by 2035, yet overlooks the fact that wind and solar energy can’t guarantee the stability needed for a reliable grid.
The reality is stark: soaring prices are a likely fallout from these energy policies. Trump’s recent energy initiatives contrast sharply, as they aim to restore affordable energy and prioritize nuclear and fossil fuels. Such measures could stabilize prices and ensure a dependable power supply.
What Biden and Newsom envisioned as a pathway to cheaper electricity has, paradoxically, resulted in the opposite. Americans deserve a power grid that bolsters economic growth, not one that jeopardizes it.
