Everyone – politicians and the public – is talking about energy costs. In particular, they’re talking about data centers that drive artificial intelligence systems and their increasing energy demand, electricity costs and strain on the nation’s already overloaded energy grid.

As a former state energy official and utility executive, I know that many of the underlying questions involving energy affordability are very complex and have been festering for decades, in part because of how many groups are involved. Energy projects are expensive and take a long time to build. Where to build them is often also a difficult, even controversial, question. Consumers, regulators, utilities and developers all value energy reliability but have different interests, cost sensitivities and time frames in mind.

The problem of high energy prices is not new, but it is urgent. And it comes at a time when the U.S. is deeply divided on its approaches to energy policy and the politics of solving collective problems.

From September 2024 to September 2025, average U.S. residential electricity prices have risen 7.4%, from 16.8 to 18 cents per kilowatt-hour. Government analysts expect prices will continue to rise and outpace inflation in 2026.

With household earnings basically flat when adjusted for inflation, these increases hit consumers hard. They take up higher percentages of household expenses – especially for lower-income households. Electricity prices have effects throughout the economy, both directly on consumers’ budgets and indirectly by raising operating costs for business and industry, which pass them along to customers by raising prices........

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