October 2, 2026 - Federal energy policy changes adopted since President Donald Trump returned to office could add an average of $6,500 to household energy expenses through 2040, according to modeling released Friday by Energy Innovation.

The California-based think tank estimated the cumulative increase for households across the contiguous United States. Projected additional spending approaches $9,000 in Oregon, Mississippi, South Dakota, Virginia and Wyoming.

Energy Innovation attributes the increases partly to federal restrictions on new wind, solar and hydrogen projects, which it says would increase reliance on natural gas for electricity generation. Changes to vehicle incentives and efficiency requirements would also increase gasoline consumption, according to the analysis. The organization expects greater fuel demand to push prices higher.

The White House disputes the analysis and maintains that expanding coal and natural gas production will improve electricity affordability and reliability.

White House spokeswoman Taylor Rogers said reducing electricity prices remains a priority. She argued that the administration’s support for dependable energy resources would address problems created by Democratic energy policies. A Department of Energy report commissioned by Trump in 2025 warned that continued retirement of coal- and natural gas-fired generating plants could increase blackout risks.

The administration favors fossil fuels for power generation, while former President Joe Biden emphasized clean energy as part of his climate strategy.

The conservative Institute for Energy Research has similarly argued that state policies contribute to high electricity costs. In December, it pointed to renewable energy requirements, carbon-free electricity targets, early coal and nuclear plant retirements, and limits on natural gas infrastructure as factors raising rates in Democratic-led states.

Multiple Factors Behind Rising Prices

Energy affordability concerns extend beyond the United States. According to the International Energy Agency, energy prices reached records between 2022 and 2024 in the European Union, United Kingdom, Japan and South Korea following Russia’s invasion of Ukraine. Since 2019, energy costs have risen faster than incomes and general inflation in many markets, including the United States and European Union.

Growing electricity consumption by data centers has added pressure in some U.S. regions. The Iran war has also sharply increased oil and gasoline prices.

The U.S. Energy Information Administration forecasts an average residential electricity price of approximately 18.6 cents per kilowatt-hour in 2027, compared with 17.3 cents in 2025 and 18.2 cents in 2026.

In an April assessment, Rhodium Group said the United States had entered a period of increasing electricity prices. Its analysis identified natural gas price volatility, grid investment needs, inflation, storm recovery, wildfire prevention and policy changes as contributing factors. Without substantial policy intervention, the research firm expects significant increases to continue over the next five years.

Federal Policy Changes Examined

Energy Innovation’s modeling isolated the effects of federal policy changes rather than state-level decisions.

The measures examined included reductions in clean energy tax-credit support under the One Big Beautiful Bill; changes to air pollution and power plant regulations; revocation of the scientific finding underlying federal climate regulation; relaxed vehicle fuel-economy standards; efforts to block California’s prohibition on new gasoline-powered vehicle sales beginning in 2035; and actions restricting wind, solar and hydrogen development.

The organization projects higher annual household energy spending in all 48 contiguous states, employment losses in 47 states and reductions in gross domestic product in 46.

Its estimates also include 37,000 additional premature deaths associated with air pollution, $72 billion in added healthcare expenses and more than 9 billion tons of additional carbon pollution.

Alaska and Hawaii were excluded because necessary federal data were unavailable, according to Robbie Orvis, Energy Innovation’s senior director for modeling and analysis.

Orvis said the combined policy changes would worsen energy affordability across nearly every state.

Climate Justice Alliance legislative director Mar Zepeda reported that her Washington, D.C., electricity bill had increased by $200 over the previous month. She attributed the increase to data center demand and argued that federal policies promoted as affordability measures would compound household financial pressures.

Disagreement Over the Findings

Rogers challenged Energy Innovation’s description as nonpartisan, citing employees’ Democratic political donations and work on climate policy with Democrats.

Energy Innovation spokesman Silvio Marcacci said the organization works with policymakers from either party who seek lower emissions and energy bills. He noted that Republican-led states have used its policy-modeling tool and that much of its underlying information comes from government sources, including EIA.

Rogers also cited high energy costs in California and New York as evidence against aggressive renewable energy requirements.

Energy Innovation countered that three of the five states facing the largest projected increases have Republican governors. Its research also associates substantial wind and solar generation in states such as Iowa and Oklahoma with comparatively smaller rate increases.

EIA figures show that average residential electricity prices rose during Biden’s presidency and have continued increasing under Trump.

Oregon Faces Largest Projected Increase

Oregon households would experience the largest cumulative increase under the modeling: approximately $9,300 between 2026 and 2040. Annual additional spending would reach $840 per household in 2035 and $1,200 in 2040.

Bob Jenks, executive director of the Oregon Citizens’ Utility Board, said the projections would intensify an existing affordability problem. He cited utility infrastructure spending and expanding data center demand as current sources of rate pressure.

Jenks warned that higher bills could lead to more service disconnections. He argued that wind and solar development, supported by cooperation between federal and state governments, would help Oregon meet its electricity needs affordably.