A recent analysis by The Wall Street Journal (WSJ), confirming previous analyses by others, shows electricity costs took a sharp upward jump shortly after Biden entered the Oval Office, and have remained elevated.
The WSJ’s analysis discovered that the average cost of electricity in the United States has climbed 29.4 percent since January 2021.
Data from the Bureau of Labor Statistics show relatively flat electricity prices from 2014 to 2020; then, prices take off after Biden entered the White House in 2021.
The WSJ Editorial Board calculated that electricity prices have increased 13 times faster under Biden than in the previous seven years, during the presidency of Donald Trump and the latter half of President Barack Obama’s second term.
WSJ Blames Biden Climate Policy
The WSJ report places the blame primarily on the Biden administration’s climate agenda.
Between forcing traditional energy plants to retire early, net-metering for solar that forces ratepayers who do not participate to subsidize those who do, the costs of grid-hardening to prepare for more intermittent sources, and the backup power needed, electricity prices have been pushed up. The WSJ also points to the 2022 Inflation Reduction Act, which heavily subsidized and financed green-energy projects.
“The Inflation Reduction Act (IRA) tax credits can offset up to 50% of a project’s cost, but offshore wind developers say this isn’t enough and are demanding to be paid higher rates—often four times more than natural gas plants,” the WSJ reports. “By driving more baseload power plants out of business, IRA subsidies will increase electric bills even more.”
Energy and Inflation Trends
The Wall Street Journal is not the only observer that has noted these energy cost trends. In 2022 and 2023, The Heartland Institute published papers analyzing year-to-year changes in energy costs across the board—not just electricity.
The 2023 analysis found that the average household is paying $2,300 more per year in direct energy costs since 2021.
Because most solar panels and wind turbine components are made by Chinese companies, H. Sterling Burnett, director of the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute, points out that the Biden administration is handing America’s energy security off to foreign actors.
“Biden has been the worst president for America’s energy security in history,” Burnett said. “Every day his policies make Americans less economically secure by making our energy system more dependent on Chinese technologies, and the Communist mandarins’ good graces.”
Energy costs also feed inflation, which has also been putting pressure on American households, Burnett says.
“Simultaneously and not coincidentally, Biden’s anti-fossil fuel bias has increased energy prices dramatically, which has fed into the general inflation, in part, by blocking and making domestic fossil fuel development more expensive,” Burnett said.
‘New Green Deal’ Disaster
Upstream, in the area of fuel production itself, there are problems too, says Gary Stone, executive vice president of engineering at Five States Energy.
The Biden administration has been hostile toward fossil fuels on the development side, leading to even more price increases, since most American electricity is still produced by fossil fuels.
“The Biden administration has been a continually growing disaster for the domestic oil and gas industry,” Stone said. “Using the ‘New Green Deal’ as a basis, they have halted or delayed drilling on federal lands, attempted to restrict drilling because of allegedly endangered species, cancelled pipelines, and restricted exports of crude and processed gas liquids.”
Stone lists other impacts like selling oil from the Strategic Petroleum Reserve in short-lived efforts to reduce prices to influence voters during mid-term elections, and encouraging automotive companies to focus on electric vehicles. It would be foolish to ignore all these issues and try instead to focus only on international events like the war in Ukraine, Stone says.
“While international oil politics, production, and pricing still control a significant portion of the market, there is no doubt the policies of the Biden regime have had a huge impact on prices,” Stone said. “Gas prices, for instance, were far lower under the Trump administration, crude oil prices were about $30 (per barrel) lower, and gasoline was around $2 per gallon less than now, all of which immediately rose under Biden.
“Instead of encouraging domestic production as Trump did, the current regime is now implementing onerous methane-emission regulations and taxes that some sources estimate will result in the abandonment of as much as 30 percent of domestic wells and greatly increase the operating costs, and reduce the life, of the remaining producers,” Stone said. “The Biden administration will serve the ‘green gods’ even if it bankrupts much of a major industry and greatly reduces the energy available to the country.”
Linnea Lueken (llueken@heartland.org) is a research fellow with the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute.
For more on the Biden administration’s energy policies, click here.
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