Utility costs emerge as campaign issue as Democrats pan sweeping budget law

WASHINGTON — Some Democratic candidates are eyeing a 2026 campaign strategy that targets Republicans for supporting provisions in their sweeping tax and spending law that analysts say may result in higher energy prices.

Last year, Donald Trump won the presidency while running on the slogan “Drill, baby, drill” and frequently criticizing solar and wind energy. But now, Democrats believe they can win votes by arguing that less support for renewables will raise Americans’ energy bills.

The gutting of clean energy tax credits contained within the newly enacted law will lead to “higher costs, fewer jobs and slower progress to decarbonize the grid,’’ said Carol Obando-Derstine, a Democrat running in a battleground district in Pennsylvania’s Lehigh Valley against Republican freshman Ryan Mackenzie. “This is a tremendous step backward.”

Obando-Derstine, who holds a master’s degree in energy systems engineering from Lehigh University and worked for an eastern Pennsylvania utility company, is one of several Democratic challengers with ties to the energy industry asserting that the newly enacted law will cost consumers and businesses more.

The clean energy tax credits were created by the Democrats’ 2022 law, known as the Inflation Reduction Act, in order to help the U.S. reach its emission reduction targets. Republicans began calling for an end to these credits shortly after passage, arguing that the Biden administration was forcing Americans to depend on less reliable forms of energy. They were finally able to realize that goal with the signing of their massive budget law earlier this month.

A new argument

Many of the early Democratic attacks on the law have focused on cuts to Medicaid and food assistance and the extension of tax breaks that they assert disproportionately benefit the wealthy.

But as Democratic candidates work to win control of the House in next year’s midterm elections, they are focusing on concerns about the cost of living – and rising energy costs are a key part of that argument.

“In the conversation I’m having with folks on the ground, the No. 1 issue continues to be affordability,’’ said Richard Lamondin, a Democrat who owns an energy consulting firm and is challenging Republican Rep. María Elvira Salazar in South Florida. “And if we can’t solve this affordability problem, and we’re creating solutions that are going to increase our energy bills, I think that is a major concern.”

Energy analysts have warned that the Republican law will likely have an impact on future utility costs, largely because of provisions that would bring up the end date for solar and wind energy tax credits. Under the law, to qualify for the credits, solar and wind projects must either begin construction by July 4, 2026, or be placed in service before Dec. 1, 2027.

Some House Republicans, many of them from swing districts such as Mackenzie’s, sought a longer phase-down of these tax credits to give certainty to projects that were already in the pipeline. But the final version of the measure hewed closer to the vision of those who called for a swift end to the tax credits, and it was only a last-minute deal with Alaska Sen. Lisa Murkowski and other Republicans that gave the one-year deadline to begin construction.

These changes could make it more expensive to finance solar and wind projects just as many utility companies are looking to renewable sources to satisfy increasing electricity demands. In 2025, solar is projected to account for 52% of all new capacity additions, according to the government-run Energy Information Administration.

An analysis from the REPEAT Project at Princeton University found that Republicans’ reconciliation law would reduce the cumulative new solar and wind capacity additions by a total of 300 gigawatts by 2035. This, in turn, would cause U.S. household energy costs to increase by roughly $280 per year in 2035.

Research firm Energy Innovation found that the law would reduce new power capacity by a total of 340 gigawatts by 2035 and raise household energy costs by $170 annually, although it noted that these figures could be higher in certain parts of the country that stood to benefit from new solar and wind projects.

Republicans reject the notion that the new law will lead to a spike in energy costs.

When debating the measure, many Republicans said solar and wind energy no longer need subsidies to remain competitive. Energy Secretary Chris Wright, who previously led oilfield services company Liberty Energy, has also argued that solar and wind make the U.S. electrical power grid less reliable since they are intermittent forms of energy, and that the U.S. should focus on adding more constantly running baseload energy to the grid such as natural gas or nuclear power.

A spokesman for the House Republicans’ campaign arm defended the party’s energy policy while taking aim at Trump’s predecessor.

“Democrats forget that (on) Day One of the Biden administration, he declared war on American energy, destroying thousands of jobs and hurting rural communities,’’ National Republican Congressional Committee spokesman Mike Marinella said in an email. “Republicans are unleashing American energy dominance and strengthening energy security, ultimately lowering everyday costs for American families and small businesses. To assert otherwise is to play politics over people.”

The new law includes a number of provisions calling for increased production of fossil fuels on public lands and waters. It also retained many of the tax credits for advanced nuclear, geothermal, hydropower and energy storage.

Republicans also point out that gas prices are low and continuing to drop in many parts of the country.

A new focus

The emphasis on cost over the environmental impact of eliminating the clean energy credits represents a messaging shift for some Democrats and their allies.

“Republicans had this tagline that they’re going to reduce costs for working families,’’ said JoAnna Mendoza, a Democrat running against GOP Rep. Juan Ciscomani in southern Arizona. “And so far, what we’ve seen is parts of this bill have been extremely harmful.’’

Arizona has benefited more than many states from the incentives contained in the 2022 infrastructure law. Curtailing tax credits for low emissions energy sources such as wind and solar will leave those industries scrambling, Mendoza said.

“Thousands of jobs in southern Arizona are going to go away,’’ she said.

But, Mendoza added, concerns about the impact of a warming climate also play a role.

“Here in Arizona … we’re seeing wildfires, not only during the summer, but throughout the year,’’ she said. “We’re already in a drought, and water (and) resources are already scarce, so, yes, this all plays into that big picture.”

The changes come as the U.S. energy market is seeing rising demand, Obando-Derstine said.

“The timing couldn’t be worse,’’ she said. “We know data centers and the electrification of everything (is) increasing demand, and we need to make sure we have enough supply.”

The Democratic-led attacks are getting reinforcement on the airwaves. One group, Climate Power, which is aligned with Democrats, is airing an ad directly blaming Trump for higher energy costs.

Protect Our Jobs, which supports the clean energy industry, launched a series of ads even before the budget law’s enactment targeting vulnerable House and Senate Republicans who supported the tax and spending measure.

“Here in America, we use a lot of energy,’’ the ad states. “So why on earth would Congress try to cut America’s clean energy production? Producing less energy means it will cost more for families and businesses every month.”

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