• President Donald Trump stated before last year’s election that he could reduce U.S. energy bills by 50% within a year. Travis Fisher of the Cato Institute suggests the current administration could do this by keeping current power prices stable.
• Fisher said that preventing projected price increases could be interpreted as meeting Trump’s target. He points to Biden administration policies as potential drivers of rising electricity rates.
• While policy changes may influence energy prices, Fisher noted that the federal government has limited control over electricity bills, making such a reduction difficult to achieve.

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President Donald Trump said on the campaign trail that he would reduce U.S. energy bills by 50% within a year. According to one industry expert, this goal could be achieved by keeping power prices from rising.

How can Trump cut energy bills in half?

Travis Fisher, the director of energy and environmental policy studies at the Cato Institute, who has also served in leadership roles at the Department of Energy and the Federal Energy Regulatory Commission, said that preventing previously anticipated increases in energy costs could be interpreted as achieving Trump’s target.

“Costs were probably set to double over the next few years,” Fisher said. “So, you could make a plausible argument that just keeping them stable instead of doubling is cutting them by half of what they would have been.”

Why had U.S. energy costs been expected to double?

Fisher highlighted policies enacted under President Joe Biden, which he says had the potential to double American electricity prices. He speculates the current administration could point to that trend of rising rates as a way of saying energy rates had been cut in half, should those costs stay around their current rate.

“We were definitely moving in a more expensive direction under Biden,” Fisher explained. “The Biden team was saying they wanted to close down every coal plant. They want to make it really hard to build new gas plants. That’s like 60% of the power supply right now between coal and gas. So that, I think, would easily double the cost of generation.”

According to a report from J.D. Power, the average monthly residential electricity bill in the U.S. reached $182 last year. That’s the highest ever recorded by the data analytics company. Electricity rates increased 23% during Biden’s presidency, a rise that the Institute for Energy Research has attributed in part to the administration’s climate initiatives.

What happens next?

Fisher suggested the reversal of Biden-era policies could impact energy costs. However, he also noted that the federal government has limited control over electricity prices.

“It would be really hard for a federal government to even make that promise, especially when it comes to your electricity bills,” he said. “I would put that in the category of a nice-sounding campaign promise that’s really, in practice, really tough to deliver on, especially on the electricity side.”

Significant reductions to energy rates, like the 50% cut Trump has pledged, remain challenging objectives due to the multitude of factors that impact power costs. However, policy changes on energy regulations could still influence price trends.