Why US household energy bills are soaring – and how to fix it | Mark Wolfe

DDonald Trump has promised to cut energy prices by 50%. Instead, average electricity prices over the past year have increased by about 6.7%, while natural gas prices have increased by 10.8%. Energy prices are influenced by many factors beyond a president’s control, including market conditions, weather-related demand, regional infrastructure constraints, and the rapid growth of energy-intensive data centers that drive the costs of new systems. Policy choices alone do not determine prices, but they shape market outcomes, and the direction of this administration’s energy policy is clear.

From his first days in office, President Trump made clear that his energy agenda would prioritize fossil fuel producers over consumers. His administration has moved to increase U.S. exports of liquefied natural gas, increasing exposure to volatile global markets. At the same time, he froze wind power projects that provide some of the cheapest new electricity, intervened to keep expensive coal plants operating and supported the elimination of energy efficiency tax credits that lower household energy bills.

The administration also proposed eliminating the Low-Income Home Energy Assistance Program and the Weatherization Assistance Program, the federal government’s primary tools for protecting low-income households from rising energy costs, even as electricity and gas prices rise. Congress ultimately blocked these cuts, sparing millions of families from immediate harm.

Proponents claim these policies promote “energy independence,” but increasing reliance on global fuel markets, while dismantling the cheapest sources of new energy and reducing demand, has the opposite effect. The result is predictable: higher prices, greater volatility and protected profits from fossil fuels, with households – particularly low- and moderate-income families – having to pay the price.

The result is that energy becomes more and more unaffordable. For example, we expect home heating costs to increase 9.2% this winter, more than three times the rate of inflation, due to rising electricity and natural gas prices and colder-than-average weather.

These increases may be an inconvenience for high-income households, but they are devastating for low- and middle-income families. Millions of households that were managing to survive are now forced into utility debt and power cuts because they cannot afford to keep their homes warm. Surveys confirm the reality on the ground: nearly one in four households now declare that their energy bill is unaffordable.

Energy consumption does not increase in proportion to income, meaning that energy costs represent a much larger share of household budgets at the bottom of the scale than at the top. As prices increased between 2024 and 2025, this imbalance widened: for households with the lowest incomes (less than $30,000), the share of income spent on household energy increased from 9.4% to 9.9%, while households with moderate incomes saw a more modest increase, from 4.9% to 5.1% ($30,000 to $58,000). For households with the highest incomes ($156,000 and above), the change was barely noticeable, going from 1.2% to 1.3%.

These outcomes are not inevitable features of energy markets. They reflect policy choices that increase system costs, weaken efficiency and affordability programs, and transfer risk to households least able to absorb it. As a result, utility arrears have risen sharply along with rising energy prices, from $15.4 billion at the end of 2021 to around $23 billion in 2025, largely due to rising electricity bills. If current trends continue, arrears could reach around $28 billion in 2026, with rising energy costs compounding broader inflation of essential goods such as rent, food and medical care.

The solution is neither complicated nor ideological. If the goal is to reduce energy bills, policy should focus on reducing system costs and reducing household exposure to price volatility. This means prioritizing the cheapest available resources: energy efficiency, weather protection, and renewable energy that reduces demand and stabilizes prices. That means expanding existing tax credits that help families make their homes more efficient and install rooftop solar panels, permanently reducing electricity and natural gas consumption. And that means protecting households from short-term price increases with targeted help on bills, rather than forcing families to absorb the shock.

These are not untested ideas. States and countries that have shifted to energy efficiency, renewable energy, and consumer protection have achieved lower long-term costs and greater price stability. The tools exist and the economic aspects are well understood.

What is missing is political will. An administration that claims to stand with consumers cannot continue to write energy policy for fossil fuel producers and expect a different outcome. Lower energy prices won’t come from supporting expensive power plants, decommissioning clean energy, or exposing households to the volatility of global fuel markets. They will come from policies that reduce demand, increase competition and put consumers first.

• Mark Wolfe is executive director of the National Energy Assistance Director Association, co-director of the Center on Energy Poverty and Climate, and an assistant professor at the Trachtenberg School of Public Policy at George Washington University.