Bulwark Takes - Energy Costs Are Way Up. Will It Hurt Trump?

Episode Date: August 20, 2025

Tim Miller and Jonathan Cohn break down why electricity bills are climbing as clean energy credits vanish, tariffs rise, and AI data centers expand.

Hey, everybody. Tim Miller from the Bullwark here with Jonathan Cohn, author of The Breakdown, one of our best newsletters. I have an internal ranking of which newsletters are the best. I'm not going to share it right now, but people should go to thebillard.com and subscribe. I wanted to talk to him about a new, I guess, political vulnerability that is emerging for Donald Trump and a new financial vulnerability that's emerging for regular Americans, and that is electricity bills rising. I'm just going to read one paragraph from Forbes and then kind of. to let you cook on it here. Electricity bills have increased almost 10% since the start of the year and could rise

even more thanks to the repeal of clean energy tax credits, new tariffs, and rapid expansion of electricity-hungry data centers to fuel a boom in AI. So we've got the tariffs, the cuts on the energy tax credits that the Biden administration have put in as well as AI all contributing to this. Does that summary sound right to you, Jonathan? and what do you see in it? Yeah, no, it does sound right. I mean, look, electricity prices, like any of the market,

there's like a bazillion things going on and, you know, it depends on what part of the country you're in. But we are seeing this rise in electricity costs. When I talk to people, when I talk to the people who know about this, the two factors they tend to cite for why they've gone up so far and why they're starting, you know, until now, the two big ones are, which you just mentioned, was the sort of surge in demand from data centers, AI.

I mean, they just suck up so much power. And then, you know, we've got this age. grid, right? You know, the distribution is old, and we've been sort of deferring the maintenance on it and the rebuilding up. So a lot of that's been going on. That gets passed on to electricity bills. That's why it's getting, you know, I mean, there's other things going on, but those are the two big drivers we're seeing right now. Going forward, you know, the Biden administration, that's the second part of what you were just talking about. Remember, it had the Inflation Reduction Act and put all this money in.

to encouraging the development of renewable energy, especially wind and solar, and that was going to add a lot of capacity. So that was there to help meet that demand for power. And that was going to help keep prices down. Well, you know, Donald Trump and the Republicans just got rid of those subsidies, got rid of those incentives. So this thing we had that was going to create all this new power capacity and bring down prices is gone. And as a result, prices are going to go up even higher. Yeah, and I've seen anecdotally, I've been hearing complaints for people, particularly down here in the sunbelt, which makes sense in the summer. In the winter, it'll start to hit the northeast to where you are up in Michigan more. No complaints for me, I should just say, my electricity bill is going, I'm like a salmon swimming upstream.

We're going down because I finally got solar panels up on my roof this summer, like the hippie lib that I've become. And so I recommend that free advertising for the solar industry, though I think the tariffs are probably harming. them a little bit, and even solar prices going up a bit. And the administration's initial answer to this, right, was like, we have this liquid gold under our feet. It's going to be an everything approach. We're going to do everything. Clearly, that is not just going to magically fix the problems at hand here.

So, like, I mean, the interesting thing about this political problem is that they don't like have a ton of levers to pull besides talk going on the tariffs. I mean, what could they even do? Yeah, you know, first of all, welcome to the Libby. a hippie liberal club. Nice to have here. Yeah, it's nice. I'm an immigrant. I'm an immigrant. And yeah, you know, this is, you know, this was the theory they told, right, was that, you know, oh, we have this liquid gold, this natural gas, you know, coal. Also, you know, we can, this is where we can get all electricity. And, you know, we have more of it, if it wasn't for all

these terrible Biden policies suppressing that. Well, that was just never true. You know, we've had record levels of output of natural gas, frankly, to the consternation of some environmentalists. You can't get that much more that quickly. In addition, there's this separate problem, which is if you want to convert natural gas into energy, you've got to have turbines. And there's like a seven-year wait to get new turbines because there's a shortage worldwide. So there just isn't that much room to get more natural gas electricity in the short term. But you know what you can get quickly? Wind and solar. They are easy to deploy. They are now cheap. You got them on your house. Lots of people are getting them on their house. And again, you know, you don't have to be like

a tree hugger to see the value here. You can be on sort of all of the above energy person. We just want as much energy as possible. The reality is if you want energy, you should love wind and solar because that's the way to get it as quickly as possible. Yeah, and batteries. I mean, like even Elon was out there. This was among the things he was criticizing in addition to the debt about the one big bill was how it got rid of a lot of these tax credits and incentives. So, I mean, like, that's pretty straightforward, but I guess just very briefly. Like, the, those, like, what are, what exactly got taken away that is having an impact? So the Inflation Reduction Act had a bunch of tax credits in there, some for consumers, some for producers, and they all have different details and whatever.

But basically the idea was it was subsidizing the development of wind and solar. That money just, and they just got taken away. And, you know, and that's actually a pretty easy way to think about. about it. It's just as a straightforward shot. I mean, that was money that was going to sort of buy energy for the American people and that money got taken away and now is, you know, being spent on tax cuts or whatever. What is the tariff impact? It's just like the equipment essentially that's, you know, for building these things. Yeah, I mean, it's the supplies, right? I mean, you know, you're building power lines, you're building generators, you're building

transformers. Um, even to the extent, you know, it's not like renewables, not, not like we're going to stop building renewables. I mean, like you said, I mean, they're a good deal and people are going to still build them, but they're going to get more expensive. So that just all gets filtered down to our price. Just yet another way that tariffs filter down to your wallet in ways that you might not realize it first. I guess the AI part is the thing I have a trouble wrap in my head around. And maybe this is just old, you know, entrepreneurial, Tim loving the entrepreneurial capitalism and it's like well it's easy to kind of blend to be like these big bad corporations are the ones that did it when they're like a lot of factors of play at heart and it's like how

could the scale of this be that big that it is impacting the grid at that level already you know because they're just like all this this is a relatively new phenomenon like how much money they're putting into all these data centers but you know there's a time story kind of about this that came out last week as well it's headline big tech AI data centers are driving up electricity bills for everyone. Do we think, is that's like, that's already happening, experts think? Or like, they're projecting it to make it worse? Or like, what's your sense of that?

I mean, my sense is a little bit of both. So, I mean, it's starting now, we're in the early phases of that. And to some extent, AI, when we talk to the drain of AI on energy, that's a bit of a catchphrase. It also refers to other data centers and operas. I mean, there's just a lot of IT stuff going on that sucks up power, even, you know, in your home, right? So, I mean, for now, we're just sort of seeing the beginnings.

But that story, it does seem like it is actually, the AI, it is such a power-intensive thing. It is already starting to sort of, you know, drive up demand for power. And look, a lot of this is, you know, this sort of expected demand going forward. Projections could be wrong. They could not require as much power as they think. But it's clearly going to require a lot. And the power companies are sort of have to account for that as they plan. An article said that it was just starting in June, electricity bill for a typical household

in Ohio increased $15 a month from data centers. Like, you know, again, people on the fixed income, this stuff adds up. In Virginia, they're expecting it to go up by as much as 25 percent because there's so many data centers there that Glenn Yonkin has brought in. So it's like that, I guess that is their evidence that this is being driven by the data centers, which is in the states that have, you know, where there are more data centers sucking up electricity, like you're seeing the prices go up more. in those states and other places, but it is kind of going up everywhere.

Yeah, no. I mean, and again, you know, you're going to see it in places like Virginia, like Texas. I mean, there's a huge, you know, a home for all these data centers. And, you know, I think it's clear we're going to see a surge. It's just a question of how much and in which parts of the country and who pays for it in the end. And, you know, the whole big gamble of what the sort of Biden administration and the Democrats did with the Inflation Reduction Act is like, this is the future of energy. Let's invest in it now. Let's get that capacity. It'll pay off in the future. I mean, once you build a wind plant, it's like cost almost nothing to run. Same with solar. It's a lot better than a coal plant. It's a lot better than

a natural gas plant. So these are investments that we're going to pay off over time. And now you have this crazy situation where not only have they taken the money away, but I mean, they're sort of loading the incentives on the other side. We're actually, they have this crazy thing in Michigan where they are forcing the local utility here to keep an old coal plant running, even though it was set to be decommissioned. It's got to actually drive up rates. I mean, they're actually making our electricity bills higher. I mean, go figure.

Yeah, it's, I do think this is kind of on the, just of the politics, which I guess more my beat than ears, but like the, you're, you know, you're seeing Trump softening the most in a few areas, but like in particular, you know, it is among the voters that, like, that really were economically focused. And, like, you're seeing right now in, like, kind of a basket of goods, you know, gas prices down a bit from where it would have been last year. But if grocery prices or electricity prices are up, that's offsetting it, interest rates have not come down as Donald Trump bitches about all the time, like housing costs is rents, not coming down, maybe rent in some parts of the country, but not across the board. and it's like people were expecting changes and they're not getting it and here you have this like topic like really hitting ahead this summer and it's going to be really bad

this winter in certain parts of the country and like they don't they're not even they're kind of just hoping people don't notice I guess like I mean have you seen anything from right right wing kind of you know rationale on this I've seen a couple of places like Marjorie Taylor Green posted a video of like a woman who is distraught talking about about, you know, how much costs are going up for her, talking about how people, how the Republicans should focus on this more. But like, you're not seeing a lot of evidence that they're dialed in on the forgotten man's electricity bill. No, I mean, there's that quote from Secretary Wright, Energy Secretary Wright, who's who said basically, we're going to have to make it

clear that these are Biden policies. I mean, I think that's going to be their strategy. They're going to say, oh, it's not our fault. It's Joe Biden's fault. You know, that's always their excuse, right? It was, you know, Joe Biden did this to you, not us. And, you know, does that work? I don't know. I mean, good luck with that one. Yeah, I mean, I don't know. I think it works with Fox viewers, right? But I don't know that it's going to help with kind of the types of voters they'll need to offset losses next year. But we're ways away. So we'll see how it turns out, Donald Trump likes to say. Jonathan, going any other smart thoughts? Anything I didn't ask you about? Any little nuggets? I will just note that you're listing the cost that we're going to go up.

You know, energy price. We got a health insurance spike coming for 20 million Americans. in December if they let those subsidies for the Affordable Care Act lap. So add that to the list. And I'm sure they'll try to blame that on Biden and Obama too. But at some point, you got to think at some point people get tired of this excuse. It's not my fault. It's not my fault. It's not my fault. I mean, well, you've been president for, you know, two years now. I mean, surely some of it's your fault. I don't know. This is a man that owns his beat. You know, he will not let me get by without a health care cost mentioned. So thank you, Jonathan Cohn. Sign up for his policy. heavy, you know, sometimes a little ephemeral with me.

You know, me and Adam Kinsiger are making fun of Pete Heggseth, uh, doing lady, lady pullups. That's fun, you know, that's like candy, but, you know, sometimes you need, you need a nutritious diet at the bulwark, you know, so get all of it. You know, eat the entire plate. And you can wear your jeans too, right, while you do it. Yeah, exactly.

Jonathan Cohn. Thank you, but his, the, the RFK, I don't want to see his legs, I think is what's happening. I think there's something really gross happening on his legs. All right, that's it. of the feed. We'll see you go soon.