OPINION:
Electricity prices have risen by 46% since 2020, and electricity demand is forecast to rise by 32% by 2030. Affordability is on voters’ minds ahead of November’s midterms.
What voters may not realize is that changing government energy priorities is part of why electricity is so expensive. President Trump’s first administration prioritized fossil fuels. President Biden revoked the Keystone XL pipeline permit, tightened rules around fossil fuels and prioritized offshore wind and solar.
Mr. Trump’s second administration has pushed for even greater use of fossil fuels and nuclear energy.
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Canceling the prior administration’s energy initiatives and going all-in on alternatives poses clear political risk for energy investments. For example, in 2022, German energy firm RWE received government permission for offshore wind leases and invested more than $1 billion in developing wind capacity off the coasts of New York, California and Louisiana.
In August, however, RWE agreed to give up those leases after concluding that it had no foreseeable path to permitting. It received a $1.22 billion settlement.
This is not an outlier. The Interior Department has now committed about $3.9 billion to repurchase leases it sold, from RWE, TotalEnergies, Bluepoint Wind, Golden State Wind and Invenergy.
These companies have redirected investment toward energy sources favored by the Trump administration. Invenergy is building natural gas plants in Indiana, Wisconsin and Iowa. RWE and Global Infrastructure Partners, the investor behind Bluepoint Wind, have directed investments toward liquefied natural gas.
The administration may count these deals as wins. Yet energy companies across the industry saw what happened to those earlier investments. If they believe an approval may lose its value after the next election, they will price in the political risk by demanding a higher return before financing a project.
The result is that energy projects cost far more to build, meaning fewer will be built. Ultimately, this results in consumers paying more for energy.
Consider utility companies’ $1.4 trillion plan to invest over the next five years in replacing aging transmission infrastructure and building new power generation capacity. An increase of even 1 percentage point in financing costs would amount to an additional $14 billion a year. Some of this increased cost is passed on to ratepayers.
Bankers recognize that the government’s flip-flopping on energy is an issue. This summer, J.P. Morgan’s natural resources bankers wrote that permitting has become the primary obstacle for companies building energy infrastructure.
Earlier this year, a bipartisan group of lawmakers introduced the CERTAIN Act, which would prevent any administration from canceling lawfully issued permits. Federal permitting and funding changes contributed to 7 gigawatts of renewable energy projects being canceled or left inactive in 2025. This amount of energy can power roughly 2 million homes. Increased oversight threatens another 92 gigawatts and more than $121 billion in investment.
Consumers must recognize this too.
Investors can put their money in other markets — such as Canada, Australia or the European Union. With the large-scale build-out of artificial intelligence data centers and the reshoring of manufacturing, we urgently need a better energy path forward — one that is not beholden to the whims of each presidential administration.
This is where Congress must do more. It can create permitting rules that apply to every energy source and survive a change in administration — with enforceable timelines, coordinated agency reviews and real limits on reopening an approval already granted.
It is time for Congress to pass this bill.
Oil and gas developers have faced reversals under the last administration; wind and solar developers face them now. Markets should decide which projects work, based on economics and execution. Investors also need a process they can plan around.
When the system’s rules turn over every four years, businesses price in the risk — and consumers end up paying for it.
• Danielle Zanzalari is an assistant professor of economics at Seton Hall University. Her research covers public finance, antitrust, energy and economic efficiency.
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