STEVE MILLOY: Big Beautiful Bill Won’t Raise Electricity Prices

Now that the debate over the Big Beautiful Bill has moved to the Senate, the New York Times is trying to scare voters and Senators that the bill’s passage will raise electricity prices. That’s simply not true, especially if the GOP members of the Senate Environment and Public Works Committee can help it.

In “Electricity Prices Are Surging. The G.O.P. Megabill Could Push Them Higher,” the Times claimed that ending wind and solar subsidies will make the electricity produced from them more expensive. That price increase, in turn, will increase demand for natural gas and the cost of electricity generated from it.

The Times is certainly correct that electricity prices are surging. But they’ve been surging for years and the reason for that surge is the Democrat war on natural gas and coal in favor of wind and solar.

Democrats, climate activists and their supporters in the wind and solar industries have claimed since the mid-2010s  that wind and solar are cheaper than coal and natural gas and that electricity prices will decrease with more wind and solar production. That has not been true anywhere in the world. The real-world proof is in the Times own admission – “electricity prices are surging” despite significant adoption of wind and solar by rich countries.

As the world has installed more wind and solar on its electricity grids, prices have only increased despite two types of subsidies. In addition to direct subsidies from taxpayers, there are also indirect subsidies in the form of cut-rate, slave-labor-made wind and solar equipment from China.

The reason for the “surging prices”, despite the subsidies, is that wind and solar require all sorts of new and expensive life support, from building extra transmission lines to get wind and solar farm-produced electricity distributed to requiring back-up coal, natural gas and nuclear power plants for when the wind doesn’t blow, the sun doesn’t shine or electricity demand is high. Wind and solar don’t have fuel costs, but they have all sort of other costs, which no one has figured out how to lower even with subsidies.

The Obama and Biden regulatory wars on coal and natural gas have also helped make electricity prices “surge.” By issuing all sorts of regulations aimed at making natural gas and coal more expensive to burn, utilities have had no choice but to pass the higher costs on to ratepayers. Moreover, electric utility managements have also been incentivized to close coal and gas plants in favor of new wind and solar because they make more money when they add new equipment, to the grid.

Goldman Sachs estimated that the green energy subsidies in the 2022 Inflation Reduction Act were worth about $1.2 trillion. About $150 billion of that was spent by the Biden administration in 2023-2024 and the version of the Big Beautiful Bill that passed the House and is now in the Senate retains about half of the remainder.

To the extent that the Senate sticks with the House bill that cut about $500 billion of the green energy subsidies, those spending cuts will reduce wind and solar installation and tend to reduce electricity prices, especially as the Trump administration is committed to jettisoning the overregulation of coal, natural gas and nuclear power.  On the other hand, the subsidies that survive the Senate, or that are added back, will continue to increase electricity prices.

The good news is that the Senate Environment and Public Works (EPW) Committee voted on June 4 to add text to the Big Beautiful Bill that would terminate all unspent Inflation Reduction Act climate spending.

But barring the miracle that the EPW text becomes law,  electricity prices will likely continue to rise under the Big Beautiful Bill. But let’s be clear: Any price surge will be because of the remaining Inflation Reduction Act subsidies, not the Big Beautiful Bill.

Steve Milloy is a biostatistician and lawyer, publishes JunkScience.com and is on X @JunkScience.

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