American families struggle with rising energy prices

Kristy Hallowell recently lost her job when her energy bill unexpectedly tripled to $1,800 a month.

Unable to pay, her gas and electricity were cut off and she, her two children and her mother spent six months last year relying on a generator to light and heat their home.

The 44-year-old is one of millions of Americans who saw their energy bills drop as prices rose last year.

Electricity is now back on at his home in Greenwood Lake, New York, after a local non-profit helped reach an agreement with the utility to accept a partial payment.

But the gas is still out and electric bills continue to rise this winter, leaving him in fear of another shutdown. He said he now owes about $3,000 to the utility.

“It was traumatic, to say the least,” he said.

Nearly one in 20 households are at risk of sending their utility debt to collections heading into the winter months, according to a recent report.

The number of households with seriously overdue utility debt rose 3.8% in the first six months of Trump’s second term, an analysis of consumer credit data, compiled by the Century Foundation and Protect Borrowers, found.

Residential energy bills have emerged as a key cost-of-living concern for American consumers, as many fear the weight of rising prices and suffering from President Donald Trump’s handling of the economy.

Official economic data from November showed that electricity prices rose 6.9% from last year – faster than general inflation.

Trump, who during his campaign said he would cut energy bills in half, claims that costs are falling. “Costs under the TRUMP ADMINISTRATION are going down, helped a lot by fuel and ENERGY,” he posted on social media in November.

The White House has blamed former President Joe Biden and the US central bank’s interest rates for the ongoing economic woes.

But after Democratic victories in recent state and local elections and polls showing declining consumer confidence, the Trump administration transferred its message to focus on affordability, in an effort to ease voters’ concerns about the cost of living in the US.

At the same time, the federal government proposed cutting the funds it gives to states to help low-income residents pay their utility bills.

Experts also warn that the Trump administration’s rollback of clean energy projects — including its recent decision lease freeze for offshore wind energy projects which is built near the Atlantic coast – can lead to higher electricity bills.

“This is going to be a big deal, both a policy matter and a political matter,” said Alex Jacquez, chief of policy and advocacy at the Groundwork Collaborative, a progressive economic think tank.

Laurie Wheelock, executive director of the Public Utility Law Project of New York, said many of her clients — low-income New York state utility customers seeking help with their bills — have let utilities fall by the wayside as rent, health insurance and other costs continue to rise.

By 2025, the non-profit sees an increase in utility account terminations for unpaid bills, Ms Wheelock said.

Before the pandemic, clients who approached the organization typically owed $400 to $900 in utility debt. Today, people often owe more than $6,000, he said.

“There is a difficult mix of rising costs and financial instability,” he added.

Winter heating costs are expected to jump 9.2% this season, according to the National Energy Assistance Directors Association, driven by rising electricity and natural gas prices and unusually cold weather.

Energy bills tend to be among the highest in the northeastern US, the report shows. But households from California to Georgia to South Dakota also felt the brunt of rising costs last year.

There are several reasons for the increase in residential energy costs, say analysts.

For one, the price of natural gas, which is a key component of nearly half of U.S. electricity generation, has jumped in the past year. The natural gas industry is pushing more and more production overseas, contributing to higher domestic prices.

Electricity generation is “overwhelmed by ever-increasing fuel costs”, said John Quigley, a senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania.

Recent shifts away from clean energy investments may also come into play. A report from the climate advocacy group Climate Power cited the Trump administration’s cancellation of projects that would have produced enough electricity to power the equivalent of 13 million homes.

The destruction of clean energy projects has contributed to a 13% jump in electricity bills since Trump returned to the White House, the report found, as the US increases its dependence on foreign oil.

Another key factor: the energy demand from the artificial intelligence boom is straining the power grid.

Tech companies from Alphabet to Amazon are ramping up their investments in AI infrastructure, and data centers need massive amounts of electricity.

The continued and increasing demand for electricity for data centers drives up prices for everyone, Quigley said.

Treasury Secretary Scott Bessent told ABC News in November that electricity prices were a “state problem”.

“There are things the federal government can control. Local electricity prices are not one of them,” he said.

But some analysts argue that if the federal government embraces clean energy, it could help lower prices.

At the state level, some lawmakers have proposed requiring large data centers to supply their own power, so that families don’t have to shoulder the cost.

In Virginia, where data centers have proliferated, governor-elect Abigail Spenberger announced plans to ensure tech companies “pay their fair share,” encouraging clean on-site and off-site generation and storage in data centers.

Virginia utility regulators recently authorized a separate rate category for the largest electricity customers, such as data centers, requiring them to pay a larger share to protect other ratepayers.

“You can deal in the near term with people’s frustrations around prices while dealing with long-term structural fixes,” said Alex Jacquez of the Groundwork Collaborative.

But any relief for consumers will take time. Residential energy prices are likely to remain high in the coming months.

Last year, Ibrahim Awadallah, 30, installed solar panels on his home in Charlotte, North Carolina in hopes of reducing his energy costs.

His plan mostly worked. His electricity bills tend to be lower than his neighbors, even considering the $180 he pays each month on his solar panel loan.

However, in October, Awadallah noticed his bill from his utility company skyrocketed — a roughly 10% increase — even though he was out of town for most of the month.

A telecommunications developer is proposing to build a data center near east Charlotte. Awadallah is concerned that the project, if approved, will increase the cost of electricity.

“I don’t think things are going to get better anytime soon,” he said.