Can the US solve its electricity crisis?
As America embraces a new year 2026, consumers are looking for relief from an ongoing “affordability crisis.”
While prices for some key items have mercifully held steady — or even come down — other costs such as rent, dining out, and hospital visits continue to climb unabated.
U.S. electricity — the one sector that affects all consumer industries in some way — is also racing upward. America’s electricity costs have jumped 32% in just the past five years. That’s a major problem for our new digital economy.
Why are electricity prices rising so rapidly?
Soaring power demand — particularly from data centers — is colliding with an electric grid already stretched to the limit. Add to that natural gas price volatility and we can see why America’s families are getting squeezed in an “affordability” crunch.
Exacerbating matters is the legacy of the Biden administration’s regulatory assault on America’s coal and natural gas power plants. The Biden team was singularly focused on reducing carbon emissions. But that agenda led to the elimination of U.S. power plants which are now needed more than ever.
Peak U.S. power demand is expected to jump 166 gigawatts in just the next five years, thanks to the vast needs of artificial intelligence and the data center boom. That’s 15 times the peak electricity needs of New York City.
This is unsustainable without more “dispatchable power” — the reliable, on-demand electricity generation provided by many of the very power plants the Biden administration sought to eliminate.
In parts of the U.S., electricity supplies are now stretched so thin grid operators and regulators are scrambling to avoid power shortfalls. The nation’s top grid reliability regulator recently called the situation a “five-alarm fire.”
To its credit, the Trump administration is working feverishly to stop the bleeding. Instead of cutting power plants from the grid, the administration is working to rapidly expand the supply of on-demand power in the United States. As a first step, this means retaining the nation’s coal generating capacity. Doing so could bolster grid reliability and ease some of the current price inflation. We know this works because America’s coal fleet is already being tapped as a buffer against rapidly rising natural gas prices. Because natural gas is the leading fuel for both electricity generation and home heating, even a small change in prices can have a large impact on consumers. Consider that, in 2025 alone, heavy domestic demand and surging exports drove up U.S. natural gas prices by an astounding 70%.
Fortunately for consumers, low-cost coal generation is still an option amidst rising natural gas prices. In 2025, coal-fired electricity generation increased more than 13% across the nation, easing natural gas demand and electricity costs for tens of millions of Americans.
Keeping America’s coal plants online is an overlooked but critically important step in recovering from the Biden administration’s failed energy subtraction.
The path to lower electricity prices is through abundant, reliable energy.
Using policy tools to grow America’s supply of electricity — not tear it down — will be essential to keeping the lights on this winter and taking the bite out of electricity price inflation.
Matthew Kandrach is president of Consumer Action for a Strong Economy (CASE).
