Energy Abundance Won’t Fix Electricity Bills

For most of the past half century, the arc of energy efficiency bent toward savings.

Once Congress passed the nation’s landmark energy-saving law, the Energy Policy and Conservation Act of 1975, federal regulators routinely tightened the screws on how much electricity, heat, and water appliances could use. Modern air conditioners use about half the amount of power that room units did in the ’80s. The latest washing machines require roughly 75 percent less water than their forebears. The refrigerator keeping your ever more costly eggs from spoiling now runs on one-fifth the electricity of models from the ’70s. But as energy standards began to eat into machines’ functionality and were drafted into the cause of limiting climate change, Americans’ thinking about energy efficiency jumped to a different, more political plane.

The Biden administration floated a first-of-its-kind standard for gas stoves that would have effectively banned sales of roughly half the models on the market. Its proposed guidelines for microwaves were so strict, manufacturers complained they might have to eliminate the numerical display that blinks the time. (The Biden administration ultimately backed off both proposals.) Now, under Donald Trump, the Energy Department is rescinding dozens of energy-efficiency rules—even the ones on which the Biden administration found compromise with industry. Congress could eliminate a federal tax credit for purchasing energy-efficient home improvements that millions of Americans are already using, and the administration looks poised to go after the Environmental Protection Agency’s popular Energy Star program.

The Biden administration justified its push for energy efficiency in part to save energy and in part to save money. Trump’s rationale seems to be that these penny-pinching compromises should be unnecessary and soon will be: Producing more energy will lead to lower prices. But if Joe Biden’s approach broke a certain kind of logic, so does Trump’s. Electricity prices could easily keep rising. And the administration has other plans for any new energy production. Using up those precious electrons on washing dishes still might not make sense, or be cheap.

Trump’s long-running complaint about underperforming toilets and showerheads—an indication that some people’s peak efficiency may be too efficient for others—does have some truth to it, according to the Association of Home Appliance Manufacturers, at least. “We can’t keep on this path without harming performance,” Jill Notini, AHAM’s vice president of communications and marketing, told me. “If we further tighten these energy standards, it’s going to come with a cost in the form of longer cycle times or fewer features or the degradation of performance.”

At the same time, the appliance industry relies on the federal government to help streamline expectations. After the combination of COVID and wildfire made air purifiers a popular household appliance, for instance, five states and the District of Columbia proposed their own standards to regulate the machines. Manufacturers petitioned the Biden administration to set nationwide standards. Yet those were among the 47 programs Trump’s Energy Department has walked back, claiming to save Americans a combined $11 billion.  

The Energy Department told me Trump “pledged to restore commonsense to our regulatory policies and lower costs for American consumers—that is exactly what these deregulatory actions do” by recognizing “that consumer choice and market-driven innovation, not bureaucratic mandates, lead to better-performing and more affordable consumer products.”

Ultimately, though, eliminating those standards would result in electrical bills nearly five times the cost of the savings, according to an analysis by the Appliance Standards Awareness Project. And those bills could keep going up. Trump might have campaigned on slashing utility prices, and promised to “drill, baby, drill” until fuel becomes so cheap that no one will mind less efficient appliances. But as president, he has also vowed to lead the United States to “dominance” in energy and artificial intelligence. His campaign poetry now faces the prosaic work of policy prioritization. In this case, that means deciding which comes first: abundant power to lower prices or the expansion of exports and AI that will, in reality, increase demand for a supply of energy that’s already low enough to keep prices high.

To meet the export goals the Trump administration is setting, the country needs to direct more of the natural gas drilled in Texas and Pennsylvania to the coasts, where a growing number of export terminals can ship the fuel to buyers in Europe and Asia. Much of the domestic fuel that could, in theory, bring down electricity prices is destined to go abroad. And gas producers can’t simply start producing more to meet demand at home. With the low global price of natural gas, drillers are struggling to maintain the existing number of rigs, never mind expanding business.

Dominating in AI will also require diverting more electricity to power-thirsty data centers. Already, those computer servers have added $9.4 billion in costs for the nation’s biggest grid, the PJM Interconnection, which stretches from Pennsylvania down to North Carolina and out to parts of Illinois. And demand is only growing. Meta, which owns Facebook, is building out a giant data complex in Louisiana that is poised to use more than twice as much electricity as the entire city of New Orleans uses at its summertime peak. Ratepayers are helping to subsidize this build-out for some of the most valuable publicly traded tech companies on Earth—and at a time when Americans are more behind on utility bills than ever recorded. Federal researchers forecast that average electricity rates would grow 13 percent from 2022 to 2025 and soar by as much as 26 percent in some regions during the same time period.

In this future, conserving a little more energy may help temper that price spike. And there is room within conservative political thinking to, well, conserve.

“If you want an appliance with lower upfront costs that’s a little less efficient with your energy, you should be able to make that choice,” Isaac Orr, the vice president of research at Always On Energy Research, a conservative think tank, told me. When he bought his home water-heating system recently, the electrician cautioned that the higher cost of the slightly more efficient model wouldn’t pay for itself in any meaningful period of time, and could come with higher repair costs. (Orr chose the less efficient model.) The political right’s issue, he said, is with energy efficiency programs that are prescriptive. “I don’t think it’s a problem if it’s descriptive,” Orr said—which is exactly how Energy Star works.

The program is entirely voluntary: Third-party researchers at EPA-approved laboratories test all kinds of appliances, provide an objective assessment of their energy efficiency, and certify the machines with its logo. It is among the federal government’s most successful forays into the consumer market. Surveys indicate that about 90 percent of American households recognize the label. Certifying the efficiency of thousands of appliances costs the EPA roughly $50 million a year, less than 1 percent of the agency’s budget. But the program saves Americans an estimated $40 billion a year in utility costs.

“No other entity I can think of in the industry can serve the function the same way that a federal agency can, because Energy Star is fundamentally built on data,” Deb Cloutier, the founder of the sustainability firm RE Tech Advisors, told me. “It’s the equivalent of, say, can a private entity run the U.S. Census?”

Cloutier was one of the original architects of the Energy Star program, but when I talked with Stephanie Grayson, she had a similar perspective. The start-up she co-founded, Cambio, makes an analytics software that helps building managers in commercial office towers and condos meet Energy Star standards and could, potentially, produce a privately held equivalent of Energy Star, at least for energy-efficient buildings. The company has already backed up a lot of the data from Energy Star, pledged not to take ownership of them, and made those data available to the public.

“The reality is, why do people use Energy Star? It’s free. You’re comfortable with your data rights and privacy and ownership. And it’s relatively easy to use,” she told me, for both companies and consumers. Although the company is “exploring more formal ways to take on the responsibility of Energy Star,” she said, “we just hope it’s not defunded.”

Ending the EPA program risks balkanizing energy certifications that have almost ubiquitous acceptance. That’s bad for manufacturers, who no longer have a universal benchmark for excellence for their products. It’s bad for consumers, who face soaring utility bills. Imagine shopping for electricity-hungry appliances without a trusted watchdog that can cut through the kind of marketing language that’s pervasive for other items—“fat free” soda, anyone? And, on a grander scale, it’s bad for a nation striving to compete with China, the world’s first electro-state, in a technological arms race.

If the administration is really going to transform the heaving American electrical grid into a tight, muscular system, designed to supply the biggest period of power growth in a generation, a mindful energy diet can still help it meet its goals.