Energy prices in the U.S. are climbing at a rate more than twice as fast as inflation.

Washington

Energy prices across the United States are rising at a rate more than double that of overall inflation, with the Consumer Price Index up 2.7 percent while energy costs have increased by 5.5 percent over the past year. Nearly 60 utility companies are set to raise rates, amounting to over $38 billion for electricity and $3.5 billion for natural gas customers, according to the Center for American Progress.

The surge in demand, fueled by data centers, artificial intelligence, and electric vehicles, is straining the country’s aging energy infrastructure. Policy changes between administrations have led to shifts in energy generation priorities, causing delays and higher costs. Relief programs at the state level offer only temporary assistance, and federal support has been reduced. Maintaining or expanding existing power sources, such as coal and natural gas, is proving costly, with expenses likely to be passed on to consumers.

Energy prices climbing twice as fast as inflation in U.S.

Across the country, energy prices are climbing more than twice as fast as inflation as the impacts of Trump administration policies begin to take effect, and it could become a focus as we head into the midterm elections. While the Consumer Price Index, which measures the average change in prices, increased 2.7 percent over the past 12 months, energy prices rose by 5.5 percent. According to an analysis from the Center for American Progress, nearly 60 utility companies are set to increase rates this year, totaling more than $38 billion for electric customers and $3.5 billion for natural gas customers. And to break all of that down, joining me now is on set a CBS News climate and environment senior coordinating producer, Tracy Wolf. Tracy, good to see you. So with the passage of this one big, beautiful bill, these bills will spike energy rates up. Why is this happening? Explain what's going on here. Yeah. Well, you went over a lot of numbers. I sure did. The reality is, this is that classic economic issue of supply and demand, right? We have never seen a demand for energy at this level for decades. And a lot of that is driven by data centers, artificial intelligence, electric cars. We were electrifying our lives. We're requiring more power now than we ever have for decades. And so where are we going to get it from? Well, a lot of our energy infrastructure is old. It's aging. We just don't have enough power to supply all of these things. And so that's why we're seeing these offsets. And it's become a little bit of a political issue, right? One administration wants to create power one way. Another one wants to create power another way. And so, really, what's left and who's getting hurt the most are the consumers, because now we're having to pay the price for it. So outside of, you know, using less electricity, maybe turning those lights off, not cooking as much, what can consumers do? What is the recourse? Absolutely. So some states have started to pass certain initiatives, grant programs, you know, energy relief programs. That's really a Band-Aid on a very big problem for a short amount of time. Now, the federal government used to have some of these programs, a very famous one called LIHEAP, which was a low-income energy assistance program. They've already projected or planned to slash those programs, because they've said, hey, states need to deal with this. But it's a very good question. How long can states continue to float these issues, because we're not going to be generating power overnight, new power overnight, I should say. So what is the fix? Where do we see this in five or 10 years from now? Right. So, really, the fix is we need to create more energy. So under the Biden administration, they had foreseen this issue. They had really invested in creating more clean energy, because renewables are so much cheaper when it comes to our power generation. The Trump administration came in and said, no, we want to focus on fossil fuels. So they have cut back on a lot of that clean energy generation. They want to build natural gas power plants. They want to keep coal plants open longer. But even that's challenging in this economic reality, because we haven't built natural gas plants in a very long time. And how long does that take? All energy is going to take, you know, five years to create. And so, you know, five years ago, when everyone said we're going to move towards renewables, a lot of these energy providers started to build out that infrastructure. Now they're told, no, don't. Pivot to this other area. Well, for example, tried to build a natural gas plant. Turbines cost three times more than they used to, and they're incredibly scarce supply. So it's not like we can just automatically create a natural gas plant. Coal plants, because coal is so much more expensive to create power compared to natural gas and renewables, they're very expensive to run. So just this week, FERC, the Federal Energy Regulatory Commission, said, hey, we're going to keep some of these. I'm sorry, they didn't say this, but they are going to start to extend the life of coal plants. But it's going to cost a lot of money. And so FERC said, we can pass that cost back on to consumers. So you can see how even trying to maintain our previous infrastructure is still going to cost us money. Yeah, AI ain't going to fix that. No. We need people and resources. No, not at all. All right, Tracy, thank you so much.

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