Posts from this author will be added to your daily email digest and your homepage feed.
While there’s plenty for voters to be worried about right now, rising utility bills have become a hot-button issue. The success of Democrats in New Jersey, Virginia, and Georgia in this week’s elections can be seen as something of a referendum on the state of energy policy and infrastructure in the US as power grids struggle to keep up with growing electricity demand from AI data centers, electric vehicles, and domestic manufacturing.
These issues aren’t going to disappear, and Democrats now face a tough road ahead to meet those challenges and make good on their campaign promises to lower electricity prices.
“Consumers have sent a clear message: they are paying attention and will hold public officials accountable for decisions that impact their utility bills,” Charles Hua, executive director of nonprofit consumer advocacy group PowerLines, said in an election day press release.
“Now, we have a bogey man”
One in three US households has had to forgo necessities like food or medicine in order to be able to pay their energy bills in 2024, according to a US Census survey. In 2015, one in five households said the same in a similar federal survey. It’s an issue called energy insecurity in policy-speak that’s been a persistent problem in the US for years. But electricity prices are on the rise, affecting more people.
New Jersey has seen one of the largest spikes, with retail rates jumping as high as 20 percent this summer, Heatmap reports. Governor-elect Mikie Sherrill said on the campaign trail that she would quickly declare a state of emergency and freeze rate hikes.
“Now, we have a bogey man — data centers who are these large energy users who are coming in and in many states getting sweetheart deals on wholesale electricity prices when regular consumers don’t have that type of sway,” says Tony Reames, a professor of environmental justice at the University of Michigan and director of the Urban Energy Justice Lab (he was also previously appointed to senior roles within the US Department of Energy during the Joe Biden administration).
Sherrill and Spanberger, who were once roommates as members of Congress in Washington, DC, both faced GOP opponents who blamed climbing costs on environmental regulations hamstringing fossil fuel generation. Voters were not entirely convinced. Solar and wind have become the cheapest sources of new electricity generation, making up a majority of new capacity planned to come online in the US.
Nevertheless, the Democratic governors-elect face serious headwinds and a lot of uncertainty when it comes to their energy goals. Experts aren’t quite sure how Sherrill could go about freezing electricity rates, which are usually set by separate regulatory authorities and wholesale auctions. The move could also face legal challenges, Hua tells Barron’s.
... continue reading