U.S. ELECTRICITY PRICES HIGHER UNDER BIDEN ADMINISTRATION

Bill Peacock

Texas Leads the Way with a 208% Increase in Wholesale Prices

Key Points

• Price Surge: The average U.S. wholesale price of electricity from 2021 to 2023 was $70 per megawatt hour, up from $41 from 2018 to 2020.

• Texas’ Race to the Bottom: ERCOT, which covers most of Texas, had the highest average wholesale price over the last three years at $117. It also had the highest three-year increase at 208%.

• Increased Subsidies: Once Biden's Inflation Reduction Act went into effect in 2023, the average cost of renewable energy subsidies tripled to $24.9 billion annually.

• Energy Policy Impact: The Biden administration’s "Unprecedented War on American Energy" has increased natural gas prices, one of the main factors in electricity prices.

• Renewable Dominance: Renewable energy is projected to make up 98.2% of new generation on the Texas grid over the next five years.

Executive Summary

During the first three years of the Biden administration, average wholesale electric prices have increased by 72% over prices in the last three years of the Trump administration. Retail prices are also up 23%. One reason for this is the increase in renewable energy subsidies authorized in the Inflation Reduction Act that President Biden signed in 2022. Another factor is the administration’s energy policies, particularly those related to natural gas. Electricity prices will continue to increase and grid reliability will continue to decrease unless renewable energy subsidies are eliminated.