Though the second Trump administration has pivoted from the Biden administration’s aggressive and climate-centric policies, Americans could still face a year of rising electricity costs and potential energy bottlenecks in 2026.
President Donald Trump and Congress voided several harsh Biden-era policies in 2025 that would have restricted oil and gas development and enacted a de facto national electric vehicle (EV) mandate. The Trump administration has cut billionsin green energy spending, which contrasts with former President Joe Biden’s focus on expensive climate initiatives.
Additionally, the Trump administration has moved to boost conventional energy sources like coal while also looking to advance newer technologies like fusion. Though the Biden administration also moved to advance nuclear energy, it cracked down on the oil and gas sector, blocking and restricting development in areas across the U.S. and freezingliquefied natural gas (LNG) exports.
The policy shift has come alongside a more “realistic” approach to the energy debate, according to Dustin Meyer, senior vice president of Policy, Economics and Regulatory Affairs at the American Petroleum Institute (API). However, the shifting energy landscape could spell bad news for the U.S. in 2026, as artificial intelligence (AI) data centers and other drivers are projected to drive demand potentially beyond America’s available supply.
“This has been a year in which the energy conversation has finally become more realistic, and I think fortunately, increasingly, we have a policy environment that reflects that,” Meyer told the Daily Caller News Foundation. “One of the key reasons why the energy conversation has become more realistic this year is because of the rise of AI and the demonstrable need for more electricity generation to meet the AI demand.”
Trump Flipped The Script
“Fixing Joe Biden’s energy crisis has been a priority for President Trump since day one, and lowering energy costs for American families and businesses will continue to be a top priority in the new year,” White House spokeswoman Taylor Rogers told the DCNF.
The administration has repeatedly touted Trump’s energy policies as ushering in lower gas prices and argued that Department of Energy(DOE) efforts to keep coal plants operating past their planned decommission dates will help maintain affordability for ratepayers.
The Trump administration also spearheaded a major deregulatory effort, with the Environmental Protection Agency (EPA) Administrator Lee Zeldin announcing that his agency is targeting the 2009 Endangerment Finding, a keystone climate regulation.
While Biden moved quickly to restrict the oil and gas industry — canceling the Keystone XL pipeline on his first day in the Oval Office — the Trump administration has fought to block offshore wind projects, most recently halting construction on all major projects in the U.S., citing national security concerns.
Some energy experts argue that Trump’s crackdown could finally bring Congressional Democrats to the table on deregulation. However, the administration’s recent pause on offshore wind projects has prompted some Democrats to threaten to walk away from a deal, as key permitting reform legislation hangs in the balance.
“If rising prices are the problem, we think permitting reform is a big part of the solution,” Meyer said.
Rising Electricity Costs
Meyer told the DCNF that “affordability has become the defining energy issue in American politics, and perhaps just the defining issue in American politics, and energy is just essential to doing that.”
Electricity costs are projected to keep rising in 2026, despite the administration’s efforts to deregulate and bolster traditional energy sources. The Energy Information Administration (EIA) projects that demand from data centers and cryptocurrency mining will contribute to rising electricity costs in 2026.
The administration and some energy experts have reasoned that blue states have higher rates and that Democrat policies restricting supply may be driving cost increases.
Rogers told the DCNF that “high energy prices are a choice – blue states like California and Maine are stubbornly choosing Green Energy Scam policies that are making electricity bills unaffordable. Meanwhile, GOP-led states are successfully lowering energy costs for their residents by embracing President Trump’s commonsense ‘DRILL, BABY, DRILL’ agenda.”
A recent analysis from the Institute for Energy Research and Always on Energy Research showed that blue states generally have higher electricity costs than red states. The report’s authors also note that several of these states with higher electricity rates also have what they term “ideological mandates” to phase out power sources like coal.
In contrast, 80% of the states with the most affordable electricity costs per kilowatt hour are “reliably red,” according to the report.
Some Democrats, some clean energy and green groups argue that it is keeping coal plants online that will drive up electricity costs. However, a July DOE grid reliability report warned that if America continues to retire reliable power without replacing it, blackouts could increase by a factor of 100 by 2030.
Artificial Intelligence
Several high-profile Republicans and Democrats alike are striking against unbridled data center expansion headed into the 2026 midterms, citing affordability concerns, among other worries.
While Trump has embraced AI development, some prominent GOP members like Republican Florida Gov. Ron Desantisand grid experts like former Federal Energy Regulatory Commission (FERC) Chairman Mark Christie have argued some of the administration’s AI policies and proposals could usurp state sovereignty and hurt consumers.
“The Biden Administration launched a war on American energy that constrained power production, drove up costs, and would have ensured the United States lost the AI race,” a DOE spokesperson told the DCNF previously, arguing that Trump’s policies are key to powering America as the tech and energy landscape shifts.
Steve Milloy, senior legal fellow at the Energy & Environment Legal Institute, previously told the DCNF that “while it’s quite possible that many consumers will face high prices for less reliable power in the near-term because of tremendous data center needs and a grid that has been crippled by green policies, what we actually need are more power plants and fewer green policies.”
Meyer told the DCNF that due to climbing energy demand, “we’re going to have to move fairly quickly here [to build energy infrastructure.] The magnitude of the demand increases are significant, and this is a pretty sharp departure from some of the trends that we’ve seen over the last 20 years.”
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