By Kennedy Maize
President Trump’s visceral dislike of “green” energy– particularly windmills, among other quirks he shares with Don Quixote – could backfire, raising consumer electric prices, according to two new studies from the Washington-based economic and energy think tank Resources for the Future.
In “Hidden Costs of Repealing EPA’s Carbon Pollution Standards: Consequences for the Environment, Households, and Society”, RFF analysts Nicholas Roy and Karen Palmer looked at the Environmental Protection Agency’s proposed repeal of the current Carbon Pollution Standards (CPS). Repeal would overturn the policy foundation of former administrations for programs to replace legacy electric generation, particularly coal and gas, with solar and wind generation. The stated goals of the EPA plan are to meet increased electricity demand while lowering consumer prices.
The result, says the RFF analysis, is that the administration’s policy action will yield unintended consequences: “If the EPA conducted a cost-benefit analysis using updated electricity demand projections and including the electricity tax credit changes from the [One Big Beautiful Bill Act], then the repeal of the CPS would fail a traditional cost-benefit test—even without factoring in the increase in greenhouse gas emissions.”
The RFF analysis concludes that repeal of the pollution standards will lower consumer electricity costs modestly. Then the administration’s signature energy and environmental policy act would wipe those savings away, raising national average electricity prices by “2.1–3.3 percent annually from now to 2050.”
Net average annual household electricity cost increases in the 2030s would total between $67 and $97. Those increases would be about halved in the 2040s “due to coal plants remaining online.” RFF calculates that repeal of the CPS will result in “Increases in coal generation of 169–456 TWh by 2040, or 4.8–8.7 times as much coal generation as was expected with the regulations in place.” That means cumulative CO2 emissions from the power sector increase by 1.2–5.8 gigatons by 2050.
Those increased CO2 emissions lead to “health damages that exceed the savings from lower compliance costs.” RFF notes that EPA ignored the negative health impacts of repeal of the CPS in its “regulatory impact analysis” supporting the administration’s action. The increases in SO2and NOx, if included in the EPA analysis, would increase “health care damages ranging 2.3–4 times the size of the electricity cost savings.”
At the same time, a separate RFF paper – “If/Then: Unintended Effects of Recent Federal Actions on Electricity Prices” – examines the administration’s ardor “to expand fossil fuel resources and reduce barriers to fossil fuel production, with the stated intention of serving national interests and reducing household energy costs. These directives have been accompanied by ongoing efforts to strengthen the fossil fuel industry and repeal regulations and legislation that might hamper growth of the industry, including the clean electricity tax credits in the Inflation Reduction Act (IRA) and the carbon pollution standards established by the US Environmental Protection Agency.”
In that paper, Roy and McKenna Peplinsk write that “RFF-produced evidence suggests that electricity prices will be higher and subject to more uncertainty as a result of the administration’s promotion of fossil fuels at the expense of solar and wind energy.”
The RFF analysts observe that natural gas prices now typically set the wholesale market price for electricity and gas prices are volatile. That also impacts retail prices. They cite a 2024 study by the San Francisco and D.C.-based environmental think tank Energy Innovations that found that states with higher shares of natural gas generation experienced larger increases in retail electricity rates between 2020 and 2023—years with high natural gas prices.
“Conversely,” says the RFF study, “renewable energies such as wind, solar, and storage projects require large up-front investment and are subject to uncertainty in capital costs. But, once built, renewables are much more insulated from volatility in global commodity prices.”
A real-world case in the autarkic, state-only Electric Reliability Council of Texas – gives contemporary, real-world evidence of the importance of renewables in keeping consumer prices down when gas prices are surging. In periods of extreme weather – which Texas has in abundance — ERCOT’s approach is to let electric prices rise to clear the market.
In the past and most recently, scorching heat in the Lone Star State has meant soaring power prices. As in the past, renewables have come to the rescue of the gas-heavy Texas generating system.
Texas energy consultant and journalist Doug Lewin Tweeted on Monday (Aug. 18), “First day of 2025 over 84,000 megawatts in Texas/ERCOT. Days like today would have been very expensive in years past. But today, with renewables meeting ~40% of peak demand, there’s an extra 20,000 megawatts of capacity available and wholesale prices are low.”
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