Republican Budget Bill to Raise People’s Energy Prices

As I just covered, repealing clean energy tax credits from the Inflation Reduction Act via the current Republican budget bill will hurt jobs and economic progress in numerous Republican-controlled states, and more than a dozen Republicans in the House of Representatives are now asking Republican Senators to help them by doing what they should have done in the first place. However, it’s not just about jobs and the economy. It’s also about energy prices.

Energy prices are expected to go up for consumers in at least 19 states if the GOP repeals clean energy tax credits it plans to repeal based on the House-passed bill. That’s according to a new report out on the matter that examined changes coming to 19 states if this bill becomes a law.

“NERA Economic Consulting (NERA) was engaged by the Clean Buyers Energy Association (CEBA) to examine the impacts of technology-neutral tax incentives, including macro-economic impacts and delivered electricity prices to residential and other ratepayers,” the report notes. “The technology-neutral tax incentives analyzed in this study include the §45Y production tax credit (PTC) or the §48E investment tax credit (ITC) to incentivize clean energy investments across various generating technologies. The PTC and ITC incentives analyzed include the bonus credits for the prevailing wage and apprenticeship requirements but do not include the bonus credits that relate to domestic content requirements, or for projects located in energy communities.*”

Jumping down into the eventual summary takeaways, the consultancy wrote:

• Results of Inflated Energy Prices Halt Economic Growth: As commercial and industrial activity declines, demand for labor and capital falls, leading to wage losses, declining household income, and shrinking investment.
• Households are hit on multiple fronts: rising utility bills, reduced employment, and falling incomes constrain consumer spending and overall economic resilience.
• The combined effect is shrinking of the economy in many states: declines, household financial strain intensifies, and output contracts in key industries, with potential job losses. The scale and severity of these impacts vary by state but are significant and far-reaching.
• Conclusion: Without American Energy Credits the system is restricted to traditional energy sources making energy more costly to meet the demand and acts as a drag on the economy and stokes inflation.

Well, that’s not good.

And all while ballooning the federal deficit!

Of the 19 states examined, 7 would actually see double-digit percentage increases in average electricity prices in the 2026–2032 period — homes and businesses.