The political reality of rising electricity prices

By Jonathan Lesser and Isaac Orr 
Real Clear Wire

Politics is often theatre and the art of the blame. With electricity prices increasing, the Democrats are ramping up to blame Donald Trump and Big Data for that affordability “crisis.”

A recent story in the Financial Times is typical of what’s being claimed by illustrating the rise in residential electricity rates from January to November 2025, a ridiculously short period for a market where polices over the past decade, not the past year, determine today’s prices. But, if one does look at the last year, that data shows the 15 states with the largest increases, 11 voted Republican. The blame is then assigned to the “red” team, and the claim that Republicans’ energy affordability policies are failing.

The article also attributes rising electricity prices to the development of new data centers, most of which have not yet been built and therefore are not contributing to increased power demand. And the article cites environmental groups blaming recently reduced government subsidies for wind and solar power as another reason for rising electricity bills, which – even if wind and solar reduce grid costs, and they don’t – has nothing to do with what’s already been built.

It’s true that electricity rates have been rising. But the federal government has no say in determining what electric utilities charge customers because the Federal Power Act preserves expansive powers for states to determine their generation portfolios, including mandates for wind and solar, and the forced closures of fossil fuel and nuclear plants, such as Indian Point in New York and Oyster Creek in New Jersey. The Federal Power Act also allows states to enact carbon taxes and other emissions-pricing schemes, such as California and Washington State’s carbon programs, and to generally regulate retail electricity resources and prices.

As a result, electricity prices are almost entirely a product of state, not federal policies.  Hence, if Republican policies make electricity expensive, why does the data show that Democrat-run states have the highest increases in electricity rates? Or, as Energy Secretary Chris Wright put it, “Blue states, high rates.”

Electric rates are set by state utility regulators through months- and sometimes years-long regulatory proceedings, meaning 2025’s increases resulted from policies and utility plans proposed and approved many years ago.

Because rate proceedings take so long, focusing solely on rate increases in recent months obscures longer-term trends that paint a different picture. Of the 15 states, including the District of Columbia, with the highest increases in residential electricity rates over the past ten years, 12 are run by Democrats and reflect those states’ long-term policies. Washington, D.C., and California earned the “prize” of the largest percentage increases.

While politicians often focus on residential electricity rates, commercial rates matter too because they directly impact businesses’ ability to survive and, ideally, grow and create jobs. Thus, with respect to “Blue states, high rates,” over the past decade, the data show states run by Democrats accounted for 14 of the 15 largest increases in commercial-sector electricity rates.

Of course, percentage increases in rates don’t tell the full story, because what ultimately matters to customers is the electric rate itself. Ignoring Hawaii, which has the highest electricity costs, in part because it is a set of remote islands, 14 of the 15 states with the highest residential rates are run by Democrats. The only Republican state is Alaska, which faces unique circumstances similar to Hawaii. Yet even Alaska’s high rates are far lower than those of six other states, all of which have mandates for advancing renewable energy and eliminating fossil-fuel generation.

While Democrats seem to think they have found a potent weapon with which to blame Republicans and Donald Trump for rising electricity prices, the facts tell a far different story.

No amount of political spin will change those.

Jonathan Lesser is a senior fellow with the National Center for Energy Analytics. Isaac Orr is vice president of research at Always-on Energy Research.