U.S. electricity prices have significantly increased for all sectors of the economy during the Biden administration, according to a new study produced by the Energy Alliance. The study found that “wholesale electric prices in the seven U.S. independent or regional service areas have increased by 72% over prices in the last three years of the Trump administration.”
The average wholesale price during the first three years of the Biden administration was $70 per megawatt-hour, an increase from $41 during the period from 2018 to 2020.
Retail prices are also up during the same period. For instance, residential electricity prices so far this year have averaged 16.34 cents per kilowatt hour. That represents an increase of 3.19 cents, or 24%, from 2020, the last year of the Trump administration.
In his speech during a campaign rally at New York’s Madison Square Garden Sunday night, former President Trump said something needed to be done about high energy prices.
“We will achieve energy independence,” he said to the crowd. “We’re gonna drill, baby, drill. And I will terminate the Green New Scam and cut your energy prices in half—50 percent—within one year from January 20.”
The study found that Texas had the highest average wholesale price over the last three years at $117. It also had the largest three-year increase at 208%. California and New York followed with the next highest increases. All these states have heavily promoted and subsidized renewable energy.
Bill Peacock, policy director of the Energy Alliance and author of the study, said that President Biden’s energy policies are behind the increase in electricity prices.
“The two main reasons for higher electricity prices are the Inflation Reduction Act and Biden’s war on American energy,” said Peacock.
The Inflation Reduction Act became law after President Biden signed it in 2022. Goldman Sachs reported that the law’s green subsidies will cost $1.2 trillion and “spur about $3 trillion in investment in renewable energy technology.”
The new investment in renewable energy is due to the hundreds of billions of dollars in subsidies for wind and solar generation in the IRA, according to the report.
“The only reason solar and wind are part of the U.S. commercial electric grid is because of subsidies,” Peacock wrote in the report. “Renewable subsidies will more than triple this decade and will be ten times more than both fossil fuels and nuclear. The primary reason for the increase in renewable energy subsidies this decade is the Inflation Reduction Act.”
Renewable subsidies under the IRA are projected to average $24.9 billion annually through 2029. For the entire decade, they are expected to total about $245 billion.
High costs are not the only problem caused by renewable subsidies, says Peacock.
“Wind and solar together now almost equal coal and nuclear as sources of electricity,” he said. “Relying on resources that only work when the weather cooperates is a recipe for serious trouble.”
Addressing the decline in reliability caused by renewables is expensive. The report discusses the example of Texas, which has chosen to deal with the reliability problem by providing subsidies to traditional generation. Over the last five years, this has cost Texans $53 billion, far more than the $16 billion direct cost of renewable subsidies.
