The Soaring Cost of Energy: How US Households Bear the Brunt of Policy Choices
American households are facing a stark reality as energy bills continue their relentless climb, with the Trump administration's clear prioritisation of fossil fuel interests over consumer protection creating predictable outcomes of higher prices, increased volatility, and protected profits for oil and gas companies. While market forces and infrastructure constraints play their part, the direction of energy policy has significantly shaped these challenging market conditions.
Broken Promises and Rising Costs
President Trump's campaign pledge to slash energy prices by 50% stands in stark contrast to the actual figures emerging from his administration. Over the past year, average electricity prices have risen by approximately 6.7%, while natural gas prices have increased by 10.8%. These increases come despite numerous factors influencing energy markets beyond presidential control, including weather-driven demand patterns and the rapid expansion of energy-intensive data centres.
The administration's policy direction became apparent from its earliest days, with a clear agenda favouring fossil fuel producers over American consumers. Strategic moves included expanding US liquefied natural gas exports, thereby increasing exposure to volatile global markets, while simultaneously freezing wind power projects that represent some of the cheapest new electricity sources available.
Systematic Dismantling of Consumer Protections
Further compounding the problem, the administration intervened to keep costly coal plants operational and supported eliminating energy-efficiency tax credits that traditionally helped lower household energy bills. Perhaps most concerning were proposals to cut the Low Income Home Energy Assistance Program and the Weatherization Assistance Program – the federal government's primary mechanisms for protecting vulnerable households from rising energy costs.
Although Congress ultimately blocked these cuts, sparing millions of families immediate hardship, the administration's intentions were clear. Supporters argue these policies promote "energy independence," yet increasing reliance on global fuel markets while dismantling low-cost domestic power sources and demand reduction measures achieves precisely the opposite effect.
The Human Cost of Policy Decisions
The consequences are becoming increasingly severe for American households, particularly those with limited financial resources. Projections indicate home heating costs will increase by 9.2% this winter – more than three times the general inflation rate – driven by higher electricity and natural gas prices alongside colder-than-average weather conditions.
While higher-income households may experience these increases as mere inconvenience, for low- and middle-income families they prove devastating. Millions of households previously managing their budgets are now being driven into utility debt and facing potential service shutoffs because they cannot afford to keep their homes adequately warm. Recent polling confirms this troubling reality, with nearly one in four households now describing their energy bills as unaffordable.
The Growing Affordability Gap
Energy consumption does not increase proportionally with income, meaning energy costs consume a significantly larger share of household budgets at the lower end of the economic spectrum. As prices rose between 2024 and 2025, this imbalance widened considerably. For households earning less than $30,000 annually, the proportion of income spent on home energy increased from 9.4% to 9.9%.
Moderate-income households ($30,000 to $58,000) experienced a smaller but still significant increase from 4.9% to 5.1%. Meanwhile, the highest-income households ($156,000 plus) saw barely perceptible change, with energy costs edging from 1.2% to 1.3% of their income.
Mounting Debt and Systemic Consequences
These outcomes are not inevitable features of energy markets but rather reflect deliberate policy choices that raise system costs, weaken efficiency and affordability programs, and shift financial risk onto households least equipped to absorb it. The consequences are measurable and growing: utility arrears have climbed sharply alongside higher energy prices, rising from $15.4 billion at the end of 2021 to an estimated $23 billion in 2025, largely driven by increasing electricity bills.
If current trends continue unchecked, arrears could reach approximately $28 billion in 2026 as higher energy costs compound broader inflation in essential expenses including rent, food, and medical care.
Practical Solutions for Lower Bills
The path toward more affordable energy is neither complicated nor ideological. If the genuine objective is lower household energy bills, policy must focus systematically on reducing system costs and minimising household exposure to price volatility. This means prioritising the most cost-effective resources available: energy efficiency measures, comprehensive weatherization programs, and renewable power sources that simultaneously lower demand and stabilise prices.
Practical steps include expanding existing tax credits that help families improve home efficiency and install rooftop solar systems, thereby permanently reducing electricity and natural gas consumption. Equally important is protecting households from short-term price spikes through targeted bill assistance programs, rather than forcing families to absorb the full financial shock.
Proven Approaches and Missing Political Will
These solutions are far from untested concepts. States and countries that have embraced efficiency measures, renewable energy development, and robust consumer protections have demonstrably achieved lower long-term costs and greater price stability. The necessary tools exist, and the economic principles are well understood within the energy sector.
What remains conspicuously absent is political will. An administration claiming to stand with consumers cannot continue crafting energy policy primarily for fossil-fuel producers while expecting different outcomes. Lower energy prices will not emerge from propping up high-cost power plants, dismantling clean energy infrastructure, or exposing households to volatile global fuel markets. Sustainable affordability will only come from policies that systematically reduce demand, increase market competition, and genuinely put consumers first in energy decision-making.
