Senator: US energy prices will spike due to Trump's decision to cut grants
The Trump administration’s plans to cancel nearly eight billion dollars in Energy Department grants is illegal, because contracts were already signed. It will also cause consumer energy costs to skyrocket.
The Energy Department cancelled $7.56 billion of funding for clean energy project earlier this month because it did not believe that the projects would provide enough return to taxpayers.
Senator Martin Heinrich from New Mexico stated that these projects would have increased energy and flexibility to the grid. "The administration is limiting the amount of energy we can put onto the grid. This will increase energy costs for consumers."
Heinrich stated that 218 out of the 233 projects, ranging from green hydrogen to battery storage, were located in states where Democratic governors are in power.
The rising cost of electricity for home use, largely due to the demand for electricity by data centers that power artificial intelligence systems, has become a major concern among voters. This is something Democrats are hoping to capitalize on in advance of next year's gubernatorial election and upcoming congressional elections.
Heinrich stated that retail electricity prices are already 10% higher than they were last year, even before any cuts are proposed.
Energy Department says it will prioritize oil, coal and gas energy to meet the baseload demand of data centers, and lower prices.
Chris Wright, Energy Secretary, told reporters that "the Americans were angry, and they had a right to be," about four years of excessive expenditures and spending money on energy which was more expensive.
Analysts warn that the U.S. will not be able to meet demand for AI power without battery storage, grid upgrades and clean energy. JP Morgan Chase announced a $1.5 trillion investment initiative earlier this week to invest in clean energies, semiconductors, and critical minerals. They also warned that it is dangerous to remove renewable energy sources from the mix.
(source: Reuters)