The Affordability Paradox

This Week's Trend In Brief:

• Recent analyses by the Institute for Energy Research and the Wall Street Journal provide much needed insight into the real drivers of electricity rate hikes, but as the 2026 midterm elections heat up, industry shouldn’t expect facts to drive the debate.

   

• With early indications that affordability will be the central election debate, we can expect pressure on the energy industry to intensify, with Democrats blaming Republican “energy dominance” and profit-seeking utilities for increasing energy bills while Republicans blame years of Democratic climate mandates and the “woke” utilities that embraced them.

   

• Joining utilities in the crosshairs are data centers and Big Tech that are becoming political stand-ins for rising costs, bringing these critical infrastructure developments and the energy companies serving them into the same affordability fight.

   

• IER and WSJ analyses show where this finger-pointing carries some truth and where it falters, with both analyses finding that prices are largely driven by state-level policy choices, leaving utilities in a difficult position where defending the facts means pointing at least in part back at the politicians and regulators who set the rules.

   

• For public affairs professionals, it is essential to act now to clearly define what is driving affordability challenges, stress-test narratives before they harden, and shape the debate early, because once blame for affordability challenges calcifies into midterm talking points, nuance disappears and reaction replaces strategy.

Digging Deeper:

Recent analyses by the Institute for Energy Research (IER) and the Wall Street Journal (WSJ) provide much needed insight into the real drivers of electricity rate hikes, but as the 2026 midterm elections heat up, industry shouldn’t expect facts to drive the debate. Instead, electricity affordability is rapidly becoming a front-line political issue, a shift that was already evident in the most recent off-year elections. In November, Democrats flipped two seats on the Georgia Public Service Commission, ending nearly two decades of Republican control in contests dominated by voter frustration over rising power bills. Similar affordability concerns surfaced in New Jersey and Virginia, where candidates faced growing pressure to explain price increases and the expanding electricity demands tied to AI and data centers. For public affairs professionals, the takeaway is that electricity affordability has moved to the political forefront, and companies that do not engage early risk being pulled into a bipartisan blame game with little opportunity to shape the narrative on their own terms.

With early indications that affordability will be the central election debate, we can expect pressure on the energy industry to intensify as partisan narratives harden and political actors turn their focus toward utilities and energy providers. Democrats are increasingly framing rising electricity costs as the result of Republicans, utilities, and their conservative energy allies, as well as the Trump Administration’s “energy dominance” agenda, a message reinforced by a well-organized activist network keeping affordability front and center for voters. Republicans, meanwhile, are countering with their own populist narrative, arguing that higher bills are the result of Democratic climate mandates and the “woke” utilities that embraced those policies at the expense of affordability. The result is that electricity prices have become a political live wire, with utilities and energy developers increasingly caught in the crossfire regardless of jurisdiction or market structure. For public affairs teams, the task now is to prepare early and carefully, or risk being pulled into a red-versus-blue fight that leaves little room for explanation, nuance, or factual grounding.

At the same time, data centers and Big Tech are increasingly being pulled into the same affordability debate as convenient villains, with their rapidly growing electricity demand offering a simple explanation for who is “driving up bills.” Environmental advocates have already moved aggressively to cement that narrative, launching well-funded campaigns that tie AI and data center growth directly to rising electricity prices. Democrats have seized on the issue through both affordability and environmental lenses, while some Republicans have echoed those concerns by questioning whether large-scale facilities and the infrastructure built to support them are truly in the best interest of local communities. Data centers became a defining issue in recent off-year elections, particularly in New Jersey and Virginia, where candidates were forced to respond to voter anxieties linking new infrastructure to higher bills. Absent early engagement, companies developing data centers, the energy companies serving them, and the firms financing that growth risk becoming collateral damage in an affordability debate that can quickly collapse into partisan blame rather than factual discussion.

The new analyses from the IER and the WSJ are now showing where this finger-pointing carries some truth and where it falters, with both analyses finding that prices are largely driven by state-level policy choices. The new research from the IER makes it clear that electricity prices are largely policy-driven, with state governments deciding which resources supply the grid and how costs are passed on to consumers. The result is a framework that has left restrictive climate mandates in several blue states translating directly into higher bills in both blue states and red states alike. WSJ has highlighted the same, as well as a broader political shift, showing that affordability is increasingly outweighing climate ambition as voters push back on the costs of aggressive decarbonization, a dynamic that we have outlined before. Now, voters’ concerns about affordability are hardening into a political litmus test. The challenge for utilities and energy companies is not a lack of explanatory evidence, but whether they can deploy these facts effectively in a political environment where doing so often means pointing back at the policymakers and regulators who set the rules, even as those same actors look to redirect public frustration elsewhere.

Taken together, these dynamics point to a familiar but increasingly unforgiving reality for the energy sector – electricity affordability is no longer a technical or regulatory question, but a populist political fault line that will shape debates well before the first votes are cast in 2026. Utilities, energy developers, and large power users are being pulled into a debate shaped by activists, partisan incentives, and simplified narratives that often obscure the real drivers of cost. Companies that wait to respond will be left reacting in an environment that rewards finger-pointing over nuance. The advantage now lies with organizations that are actively monitoring how affordability is being framed, anticipating where pressure will come from next, and developing clear, credible narratives that can withstand political scrutiny. Once blame for affordability challenges calcifies into midterm talking points, nuance disappears and reaction replaces strategy.

Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.