Electricity prices in the United States are climbing at their fastest pace in years, squeezing household budgets already stretched by inflation. New federal data shows average residential electricity costs rose about 6.7% between June 2024 and June 2025, more than double the overall inflation rate during the same period. Since 2022, prices have increased roughly 13% nationwide, a sharp jump that has left many Americans paying significantly more to keep the lights on.
Across Texas, electricity and natural gas prices are also climbing. While seasonal demand and fuel costs play a role, a deeper structural shift is driving prices higher. Texas is seeing explosive growth of energy-hungry data centers, artificial intelligence operations, and cryptocurrency mining. These industries require enormous amounts of power to keep servers running and cool, often consuming as much electricity as entire cities. The result is added strain on regional power grids, which raises wholesale energy costs and trickles down to residential consumers.
Texas’s deregulated and competitive energy market has historically delivered some of the lowest power prices in the nation, thanks in large part to abundant natural gas and a booming build-out of wind and solar. But with dozens of new data centers and crypto mines plugging into the grid demand is rising faster than new capacity can be built.
This drives up both electricity and natural gas costs, leaving households with higher monthly bills. But correspondingly it is a driver of inflation overall since the cost of goods and services are also going up.
The most effective solution is renewable power is under political attack. Wind turbines in the Panhandle and solar farms across West Texas supported by battery stations have become the cheapest and quickest form of new energy to build. Unlike natural gas plants, which take years and are exposed to volatile fuel prices, wind and solar provide stable, low-cost power. These resources have been instrumental in keeping Texas lights on during peak demand and lowering wholesale prices when the wind is blowing and the sun is shining.
Yet, both the Trump administration and Texas Republican leadership have targeted renewable energy with policies and rhetoric that undermine expansion. Proposals to limit federal tax incentives, impose new fees on renewable developers, bans on permitting renewables and prioritize fossil fuel plants in grid planning threaten to slow or halt growth in clean energy. In Texas, bills that make it harder to site new wind and solar projects or that favor costly gas plants shift the balance of investment away from the cheapest options available.
The political attacks on renewables not only endanger climate goals but also drive up costs for everyday Texans. At a time when data centers and AI are reshaping energy demand, undermining the growth of low-cost renewables locks households into a future of higher bills. The battle over the grid is no longer just about technology or ideology, it’s about whether families can afford to keep the lights on.
Guest:
Ed Hirs teaches energy economics courses to undergraduate and graduate students within the department of economics at the University of Houston. He is also appointed as an inaugural University of Houston Energy Fellow.
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This interview will air live on Wednesday, August 27, 2025, at 12:00p.m.
