American Families Face Soaring Energy Prices

Kristy Hallowell had just lost her job when her energy bill unexpectedly tripled to $1,800 a month.

Unable to pay, her gas and electricity were cut off and she, her two children and her mother spent six months last year relying on a generator to light and heat their home.

The 44-year-old is one of millions of Americans who have fallen behind on their energy bills as prices have soared over the past year.

Power is now restored to her home in Greenwood Lake, New York, after a local nonprofit helped reach a deal with the utility to accept partial payment.

But the gas is still cut off and electricity bills continue to increase this winter, which makes him fear another cut. She said she now has about $3,000 in utility debt.

“It’s been traumatic to say the least,” she said.

According to a recent report, nearly 1 in 20 households are at risk of having their utility debt sent to collections as the winter months approach.

The number of households with delinquent utility debt increased 3.8% during the first six months of Trump’s second term, according to analysis of consumer credit data compiled by the Century Foundation and Protect Borrowers.

Residential energy bills have become a major cost-of-living concern among U.S. consumers, with many buckling under the weight of rising prices and embittering over U.S. President Donald Trump’s handling of the economy.

Official economic data for November shows electricity prices rose 6.9% from a year earlier – much faster than overall inflation.

Trump, who during his campaign said he would cut energy bills in half, claimed costs were falling. “Costs under the TRUMP ADMINISTRATION are going down, thanks to gasoline and ENERGY,” he said on social media in November.

The White House blames former President Joe Biden and the U.S. central bank’s interest rates for continued economic woes.

But following Democratic victories in recent state and municipal elections and polls showing declining consumer confidence, the Trump administration has changed his message focus on affordability, aiming to ease voters’ anxiety about the cost of living in the United States.

At the same time, the federal government has proposed slashing the funds it gives states to help low-income residents pay their utility bills.

Experts also warn that the Trump administration’s retreat from clean energy projects – including its recent decision to suspend leases for offshore wind energy projects under construction near the Atlantic coast – could drive up electricity bills even more.

“This is going to be a huge deal, both in terms of policy and politics,” said Alex Jacquez, head of policy and advocacy at the Groundwork Collaborative, a progressive economic think tank.

Laurie Wheelock, executive director of the Public Utility Law Project of New York, said many of her clients — low-income utility customers in New York state who are looking for help paying their bills — have let utilities fall by the wayside as rent, health insurance and other costs continue to become more and more expensive.

In 2025, the nonprofit saw an increase in utility account terminations for unpaid bills, Ms. Wheelock said.

Before the pandemic, customers who contacted the organization typically had between $400 and $900 in utility debt. Today, people often owe more than $6,000, she said.

“There has been this difficult mix of rising costs and financial instability,” she added.

Winter heating costs are expected to increase 9.2% this season, according to the National Energy Assistance Director Association, due to rising electricity and natural gas prices and unusually cold weather.

Energy bills tend to be among the highest in the northeastern United States, according to the report. But households from California to Georgia to South Dakota are also feeling the pressure of rising costs over the past year.

Analysts say there are several reasons for rising residential energy costs.

For one, the price of natural gas, which is a crucial component in nearly half of U.S. electricity generation, has surged over the past year. The natural gas industry is increasingly exporting its production, which is contributing to rising domestic prices.

Electricity generation is “struggling with ever-increasing fuel costs,” said John Quigley, a senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania.

The recent shift away from clean energy investments could also play a role. A report from climate advocacy group Climate Power cites the Trump administration’s cancellation of projects that would have produced enough electricity to power the equivalent of 13 million homes.

The killing of clean energy projects has contributed to a 13% increase in electricity bills since Trump returned to the White House, the report said, as the United States increases its dependence on foreign oil.

Another key factor: energy demand due to the boom in artificial intelligence is putting a strain on the electricity grid.

Tech companies from Alphabet to Amazon are ramping up their investments in AI infrastructure, and data centers require enormous amounts of electricity.

The continued and growing demand for electricity for data centers is driving up prices for everyone, Quigley said.

Treasury Secretary Scott Bessent told ABC News in November that electricity prices were a “state problem.”

“There are things the federal government can control. Local electricity prices are not one of them,” he said.

But some analysts say if the federal government embraced clean energy, it would help drive prices down.

At the state level, some lawmakers have proposed requiring large data centers to provide their own electricity, so families don’t bear the costs.

In Virginia, where data centers have proliferated, Governor-elect Abigail Spanberger announced plans to ensure technology companies “pay their fair share,” by encouraging clean production and storage on and off-site in data centers.

Virginia utility regulators recently authorized a separate rate category for larger electricity customers, like data centers, requiring them to pay a larger share to protect other ratepayers.

“You can manage people’s frustrations over pricing in the short term while also managing these structural fixes in the long term,” said Alex Jacquez of Groundwork Collaborative.

But any relief for consumers will take time. Residential energy prices are expected to remain high in the coming months.

Last year, Ibrahim Awadallah, 30, installed solar panels at his home in Charlotte, North Carolina, hoping to reduce his energy costs.

His plan largely worked. His electric bills tend to be lower than those of his neighbors, even taking into account the $180 a month he pays for his solar panel loan.

Yet in October, Awadallah noticed that his bill from his utility company was getting more expensive — an increase of about 10 percent — even though he was out of town much of the month.

A telecommunications developer has proposed building a data center nearby in east Charlotte. Awadallah fears that the project, if approved, could drive up electricity costs even further.

“I don’t think things will get better anytime soon,” he said.