President Trump was elected in part on a promise to unleash American energy dominance and lower the cost of living, pledging to “halve energy costs in 18 months.” Now, lawmakers are debating a move that would do the opposite.
Parts of the “One Big Beautiful Bill” that the House of Representatives passed last month will undoubtedly help Americans keep more money in their pocketbooks. However, the legislation is reducing critical tax credits that will raise energy bills, slow economic growth, and, unfortunately, hit red states the hardest.
American energy dominance should involve nuclear, hydrogen, geothermal, solar, wind and more. These industries are providing reliable, low-cost energy nationwide. Technology-neutral energy tax credits — including investment and production tax credits — are critical to this strategy of energy dominance.
These tax credits do not favor any specific technology; instead, they allow the free market to decide what works best for each community. As written, the legislative text released by the Senate and House makes these tax credits largely unworkable by phasing them out, requiring construction on projects to begin within 60 days of the bill’s passage, and creating unworkable administrative processes to access them.
A new study by NERA Economic Consulting examines how repealing these credits would lead to a spike in electricity prices, hinder significant investments and job creation, slow states’ economic growth, and lower household income across many states between 2026 and 2032.
Many states, from the rapidly growing Southeast to the industrial Midwest, would see electricity prices rise if the final bill were to pass, making the tech-neutral tax credits unworkable. North Carolina would see a 13 percent increase in electricity prices for households and a 20 percent increase for businesses. The typical North Carolina resident pays $2,436 yearly for electricity and would see an increase of $250 annually.
Next door, South Carolina would see 5,000 jobs lost and electricity prices increase by more than 11 percent for households and 17 percent for businesses. Ohio would lose $1.83 billion in gross domestic product.
Kansas would experience 5,250 lost jobs and electricity price increases of 14 percent for households and 17 percent for businesses. Nebraska would see an 18 percent increase in electricity prices for businesses and a 16 percent increase for households. These trends persist for nearly every state examined in the study.
Higher electricity prices for retailers and small businesses mean job losses in small towns; higher costs for local manufacturers mean less investment; and higher household energy costs mean tighter household budgets while the nation is still reeling from inflation.
The loss of investment in energy projects will slow economic growth in communities that rely on those jobs. Demand for labor and capital declines, leading to wage losses and reduced household income. Households are hit on multiple fronts: rising utility bills, higher natural gas prices to heat homes and water, reduced employment, and falling incomes all constrain consumer spending and overall economic resilience. With the growing demand for energy driven by high-tech industries and advanced manufacturing, less new energy deployment means more grid strain and higher energy costs for households and businesses nationwide.
Many conservatives recognize what’s at risk from repealing these tax credits. In March, 21 House Republicans wrote that any changes to the tax credits would “inhibit our ability to deploy new energy production, risk sparking an energy crisis in our country, resulting in drastically higher power bills for American families.”
In April, Republican senators John Curtis of Utah, Jerry Moran of Kansas, Lisa Murkowski of Alaska and Thom Tillis of North Carolina argued, “A wholesale repeal, or the termination of certain individual credits, would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy.”
Sen. Kevin Cramer of North Dakota warned that phasing out the credits “would kneecap newer technologies that Republicans favor like advanced nuclear reactors and geothermal.” Sen. Shelley Moore Capito of West Virginia said, “There has been job creation around these tax credits.”
Voters have demanded relief from the cost-of-living crisis. Preserving these tax credits is a fiscally responsible way to attract private investment, expand domestic energy production, and lower costs for American families and businesses.
Energy dominance necessitates smart tax policy. Senators have an opportunity to benefit their constituents by preserving these tech-neutral tax credits.
