The states where electric bills will rise the most and least thanks to Trump's budget bill

A new analysis by Energy Innovation, a nonpartisan energy think tank, projects significant increases in U.S. electricity prices over the next decade due to President Trump's budget bill. The bill's elimination of clean-energy tax credits is expected to curb private-sector investment in renewables, leading to greater reliance on more expensive natural gas and shrinking cost-effective electricity capacity. This shift could result in substantial annual price hikes for consumers, with Missouri facing the largest projected increase of $640 by 2035. Furthermore, the analysis suggests a potential $980 billion reduction in U.S. GDP and job offshoring due to higher energy costs.

Analysis

An analysis by the nonpartisan think tank Energy Innovation projects that the proposed "One Big Beautiful Bill" will significantly raise U.S. electricity prices by 2035. The primary mechanism for this increase is the immediate repeal of tax credits for wind and solar projects and the elimination of credits for electric vehicles, home efficiency, and clean energy manufacturing. According to the report, this policy shift will deter private-sector investment in low-cost renewables, forcing the national grid to become more dependent on increasingly expensive natural gas to meet rising power demand. The macroeconomic consequences are forecast to be severe, with a potential reduction in U.S. GDP of over $980 billion and a shift of manufacturing jobs overseas. The impact will vary significantly by state, with annual household energy bills in Missouri projected to rise by $640 by 2035, the largest increase, while Washington is expected to see the smallest increase at just $55.

Key Decisions for Investors

• Investors should reassess exposure to the renewable energy sector, as the removal of key tax credits could create significant headwinds for solar and wind developers, manufacturers, and related supply chains.
• Consider the regional disparities in utility sector risk; utilities in states like Missouri, Kentucky, and South Carolina, which are projected to see the largest price hikes, may face increased regulatory pressure and margin challenges compared to those in less-affected states like Washington and Maine.
• Monitor the legislative viability of this bill as a potential macro-level risk, given the report's forecast of a $980 billion GDP contraction, which would negatively impact energy-intensive industries and overall market sentiment.
• For ESG-mandated portfolios, this policy represents a significant risk to decarbonization pathways and could necessitate a strategic review of holdings in companies that might pivot their energy strategies away from renewables if these incentives are removed.