Trump’s plan for rising energy costs: Pump oil, make data centers pay

Energy affordability took center stage during President Trump’s long and sometimes rambling State of the Union address Tuesday night, as the president promised to lower electricity prices in an effort to ease voters’ concerns about rising costs.

The president announced a new “ratepayer protection pledge” to protect residents from higher electricity costs in areas where power-hungry artificial intelligence data centers are being built. Trump said big tech companies “will have an obligation to provide for their own electricity needs” under the plan, although the details of what that commitment actually entails remain vague.

“We have an old grid – it could never handle the kind of production, the amount of electricity needed, so I tell them they can build their own plant,” the president said. “They’re going to produce their own electricity… while reducing electricity prices for you.”

The announcement comes as polls show Americans are dissatisfied with the economy and concerned about the cost of living. Experts on both sides of the political spectrum said the issue of energy affordability could translate into poor results for Republicans in next November’s midterm elections, as it did in a few key elections in New Jersey, Virginia and Georgia last year.

As Trump has focused on increasing domestic production of oil, gas and coal, residential electricity bills have skyrocketed, from 15.9 cents per kilowatt hour in January 2025 on average to 17.2 cents at the end of December, according to the U.S. Energy Information Administration.

A year into his second presidential term, Trump has significantly altered the federal energy and environmental landscape, reversing many of the Biden administration’s efforts to prioritize electrification initiatives and investments in renewable energy through the Inflation Reduction Act and the bipartisan Infrastructure Act.

Among several changes, the Trump administration cut funding for solar programs, ended federal tax credits for electric vehicles, and canceled subsidies for offshore wind energy — even going so far as to attempt to halt some of those projects that were nearing completion along the East Coast.

Trump has also defended fossil fuel production and on Tuesday doubled down on his “baby drilling” agenda, touting lower gasoline prices, increased U.S. oil production and new oil imports from Venezuela.

Many of the president’s efforts are aimed at easing Biden-era regulations that he has called burdensome, ideologically driven and costly for taxpayers.

Trump is directly attacking California, which has long been a leader on environmental issues. Last year, the president moved to block California’s long-standing authority to set tailpipe emissions standards tougher than the federal government’s — an ability that helped the state address historic air quality problems and also supported its ambitious 2035 ban on the sale of new gasoline-powered cars.

Trump also cut $1.2 billion in federal funding for California’s efforts to develop clean hydrogen energy, while leaving funding for similar projects in states that voted for him intact. In November, his administration announced it would open the Pacific coast to oil drilling for the first time in nearly four decades, a move the state vowed to fight.

But perhaps no issue has captured the attention of voters more than energy affordability.

So far, Trump has canceled or delayed enough projects to power more than 14 million homes, according to a tracker from the nonprofit Climate Power. The group’s senior adviser, Jesse Lee, described the president’s data center announcement as an “empty, toothless promise based on backroom deals with his own billionaire donors.”

“Even worse, Trump continues to block clean energy production across the board – the only sources that can meet demand, ensure utility bills don’t continue to skyrocket, and avoid massive new amounts of pollution,” Lee said in a statement.

Earlier this month, Trump’s Environmental Protection Agency rescinded the endangerment finding, the U.S. government’s 2009 assertion that greenhouse gases are harmful to human health and the environment, in what officials described as the most significant act of deregulation in U.S. history. This discovery forms the basis of much of American climate policy. The EPA also relaxed guidelines for emissions from coal-fired power plants, including mercury and other dangerous pollutants.

The president’s environmental record thus far is “written in rollbacks that put the interests of some polluting companies above the health of ordinary Americans,” read a statement from Marc Boom, senior director of the Environmental Protection Network, a group made up of more than 750 former EPA staffers and appointees.

Additionally, Trump has worked to undermine climate science in general, often describing global warming as a “hoax” or “scam.” During his first year in office, he fired hundreds of scientists working to prepare the National Climate Assessment, laid off staff at the National Oceanic and Atmospheric Administration and dismantled the National Center for Atmospheric Research, one of the world’s leading climate and weather research institutions, among other efforts.

In total, the administration has taken or proposed more than 430 actions that threaten the environment, public health and the ability to address climate change, according to a tracker from the nonprofit Natural Resources Defense Council.

The opposition’s choice as rebuttal speaker is indicative of how seriously it takes the issue of energy affordability: Virginia Gov. Abigail Spanberger focused heavily on energy affordability during her campaign against Republican Lt. Gov. Winsome Earle-Sears last year, including pledging to expand solar energy projects and technologies such as fusion, geothermal and hydrogen. Virginia is home to more than a third of all data centers in the world.