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Electricity Price Surge Forecasted by Bank of America Amid Biden Policy Effects

Payam Javan: In a recent report by the Bank of America Institute, concerns have been raised about the impact of President Joe Biden’s policies on electricity costs in the United States. Titled “Powering the Revolution,” the July 2 note highlights a significant rise in energy price inflation, which reached 5.9% year-over-year in May, up from 3.8% in January. Analysts attribute this trend to Biden administration initiatives such as increased electric vehicle (EV) demand, adoption of heat pumps, and the expansion of data centers and manufacturing capacity for artificial intelligence (AI).

Despite a recent slight decline in median utility payments, consumers are still paying considerably more than in 2019, particularly for electricity. The report warns that these costs could continue to escalate due to growing electricity demand driven by industrial onshoring and the burgeoning AI sector. The need for substantial investments in electricity generation and distribution infrastructure is anticipated to further strain consumers’ utility bills in the foreseeable future.

The report underscores concerns about the sustainability of these policies amid global commodity price fluctuations and the shift towards intermittent renewable energy sources like wind and solar. Grid reliability has become a focal point, with experts cautioning about potential supply crises, especially during extreme weather conditions.

The White House has yet to comment on the findings of the report, which draws on internal Bank of America data. It emphasizes the potential economic disparities, noting that utility bills disproportionately affect lower-income households and older generations. As the Biden administration continues to promote its energy and economic policies, monitoring their impact on consumer affordability remains crucial.

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