U.S. electricity prices are much higher under the Biden administration, according to a recent report from the Energy Alliance. The report states, “During the first three years of the Biden administration, average wholesale electric prices in the seven U.S. independent or regional service areas have increased by 72% over prices in the last three years of the Trump administration.”
Retail prices are also up over the last three years. U.S. residential prices this year are up 24% from 2020, while prices for all end users—residential, commercial, industrial, and transportation—have increased by 23%. Based on projections for electricity consumption this year, the increase will cost Americans about $98 billion.
Electricity prices are also higher in Ohio. The average cost for residential electricity this year in Ohio is 15.86 cents per kilowatt-hour, up from 12.07 cents in 2020. This 31% increase is higher than the national average.
Wholesale prices are also up in the PJM service area, which manages the grid for Ohio and other Midwest and East Coast states. The average wholesale price over the last three years is $58, compared to $41 from 2018 to 2020, marking a 43% increase.
According to Bill Peacock, policy director for the Energy Alliance and author of the report, the Biden administration’s energy policies are responsible for the price hikes.
“It is as if they have declared war on American energy,” said Peacock. “Spending billions of taxpayer money on renewable energy subsidies and going after natural gas is a sure way to increase energy costs and reduce grid reliability.”
The report points out that increases in renewable energy subsidies through the Inflation Reduction Act, signed by President Biden in 2022, have led to the rapid growth of renewables across the country.
According to the study, “in 2023; coal, nuclear, and renewable energy converged to become essentially equal generation sources on the U.S. grid.” This growth is putting a great strain on the reliability of the grid in many states.
The reason for this is that the reliability value of renewable energy declines as its grid penetration increases. This is caused by wind and solar’s inability to generate electricity on demand; both technologies can only produce electricity when weather conditions are favorable.
The report notes that this “means that either batteries or natural gas backup generation must be on standby for those periods when the wind doesn’t blow or the sun doesn’t shine.” This backup generation adds higher costs to the reliability challenges that renewables present.
The subsidies are bringing more renewables to Ohio, primarily in the form of solar generation. With eight operating solar plants and 3,224 megawatts of installed solar capacity, Ohio ranks 14th among the states, up from 32nd in 2022. And more is on the way.
Currently, 12 new solar projects are under construction, which will add another 2,542 megawatts of installed capacity to the grid. Additionally, 28 more projects have been approved by the Ohio Power Siting Board.
The increase in solar is projected to cause more reliability problems for the state.
“As energy demands grow, it creates a problem for PJM,” reported CenterSquare.
“PJM expects demand to increase significantly by 2040, but the power supply is becoming more intermittent as solar projects dominate the queue to get plugged into the grid.”