Trump-era policies projected to raise household energy costs through 2040

Households across the contiguous United States are projected to spend substantially more on energy through 2040 as a result of federal policy changes made since President Donald Trump returned to office, according to modeling reported by ClickOnDetroit.com.

The analysis by Energy Innovation, a California-based research organization, estimates that the average household will pay an additional $6,500 over that period. In Oregon, Mississippi, South Dakota, Virginia and Wyoming, the projected increase is about $9,000 per household.

The organization attributes the higher costs to policies that reduce support for clean-energy projects, weaken vehicle-efficiency requirements and encourage greater reliance on fossil fuels. Its model assumes that electricity producers will need more natural gas when new wind and solar developments are canceled or blocked. It also anticipates increased gasoline demand after the repeal of measures designed to promote more efficient, lower-emission vehicles. Greater demand, the analysis says, would put upward pressure on prices.

A policy dispute with consequences beyond bills

Energy Innovation examined the effects of federal decisions rather than state-level policy choices. Its review included the tax package signed by Trump that reduced funding for clean-energy credits, rollbacks of environmental rules governing air pollution and power plants, and the withdrawal of a scientific finding central to federal climate policy.

The analysis also considered the loosening of fuel-economy standards, the federal move to prevent California from enforcing its planned ban on new gasoline-powered vehicles beginning in 2035, and actions to halt wind, solar and hydrogen projects.

Across the contiguous states, the model forecasts higher annual household energy costs everywhere. It also projects job losses in 47 of 48 states and reduced gross domestic product in 46. The organization estimates that the environmental rollbacks could contribute to 37,000 additional premature deaths linked to air pollution, $72 billion in added health-care expenses and more than 9 billion tons of extra carbon pollution.

Alaska and Hawaii were excluded because necessary federal data was unavailable, said Robbie Orvis, Energy Innovation’s senior director for modeling and analysis. He said the combined policy changes worsen both the national outlook and the energy-affordability problem in nearly every state.

The projections arrive as electricity prices are already increasing faster than inflation in many parts of the country. Rising demand from data centers has been cited as one factor in some areas, while the war in Iran has pushed oil and gasoline prices sharply higher.

Data from the Energy Information Administration shows that the average residential electricity price was about 12.6 cents per kilowatt-hour in January 2021. It had reached almost 16 cents by January 2025, 17.45 cents in January 2026 and 18.31 cents in July.

Administration challenges the forecast

The Trump administration argues that its energy strategy will reduce costs by expanding dependable power sources such as coal and natural gas. White House spokeswoman Taylor Rogers said lowering electricity prices is a priority and accused Democrats of damaging the grid by expanding clean energy.

Rogers also questioned Energy Innovation’s description of itself as nonpartisan, pointing to employees’ political donations and past work with Democratic officials. The organization’s spokesman, Silvio Marcacci, said it works with policymakers from either party who seek lower emissions and cheaper energy. He added that its modeling tool has been used by Republican-led states and relies heavily on government data, including information from the Energy Information Administration.

Rogers cited California and New York as examples of Democratic-led states where renewable-energy mandates have coincided with high electricity costs. Energy Innovation’s results, however, show that three of the five states with the largest projected household increases have Republican governors.

The model also divides the projected costs by presidential voting patterns. Households in states that supported Trump in 2024 are expected to spend an average of $7,000 more cumulatively, compared with $5,800 in states that voted for Kamala Harris. The organization said states with substantial wind and solar generation, including Republican-led Iowa and Oklahoma, have recorded some of the smallest rate increases.

Oregon faces the largest projected increase

Oregon has the highest forecast in the analysis. Federal policy changes are expected to add $840 to the average household’s annual energy spending in 2035 and $1,200 in 2040. Between 2026 and 2040, the cumulative increase is projected at $9,300.

Bob Jenks, executive director of the Oregon Citizens’ Utility Board, said the estimate is especially troubling because residents already face affordability pressures. Utilities are raising rates to fund system upgrades, while data centers are increasing electricity demand, he said.

Jenks warned that more households could face service shutoffs if they cannot keep up with their bills. He supports expanding wind and solar power in Oregon and said federal officials should work with states to develop the resources they need rather than restrict their options.