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GOP budget to raise Minnesota household energy bills by 28%, analysts say • Minnesota Reformer [1]
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Date: 2025-07-03
The $4 trillion GOP budget bill that squeaked through the U.S. Senate this week yesterday would “help usher in a golden age for American workers, farmers and families,” according to House Ways and Means Committee Chair Jason Smith, R-Missouri.
One nonpartisan think tank disagrees, strongly. Energy Innovation says the bill will kill nearly 23,000 Minnesota jobs, slash state gross domestic product by $22 billion and raise household energy bills by $2.7 billion — a 28% increase — over the next decade.
The principal culprit: a rapid phaseout of federal tax credits for wind and solar power, which are cheaper and faster to build and operate than “baseload” gas, coal and nuclear power plants. Along with batteries, they account for the vast majority of recent additions to the U.S. grid.
“Minnesotans are struggling to pay the bills in the face of rising inflation,” Energy Innovation Senior Director of Modeling and Analysis Robbie Orvis said in a statement. “Congress has decided to kneecap utilities’ ability to build new generation to meet demand and impose billions in new energy costs on households and businesses.”
By damaging wind and solar, the Republican bill hands a win to fossil fuel industries, with whom President Donald Trump and the GOP are closely aligned. Oil and gas interests donated more than $75 million to Trump’s 2024 campaign, the Republican National Committee and other related committees. Trump told a gathering of oil and gas executives gathered at Mar-a-Lago last year that he’d give them their policy wish list in exchange for $1 billion in campaign donations, the Washington Post reported.
Given the newly important role of wind, solar and other alternative power sources, the GOP bill would hamper development of new electricity generation. Energy Innovation says the GOP budget will slow power plant construction in Minnesota by nearly 25% over the next decade as the AI boom drives electricity demand growth to levels not seen since the early 2000s. Some grid experts believe that will increase the risk of power outages in the coming years; one Democratic lawmaker called the GOP budget “the Big Blackout Bill.”
Less supply and increasing demand almost always means higher prices for consumers.
In a statement calling the bill “a huge step in the wrong direction,” Citizens Utility Board of Minnesota Executive Director Annie Levenson-Falk suggested utility service shutoffs could further increase from already-elevated levels.
“More than 91,000 Minnesota households had their utility service shut off for nonpayment last year,” the highest annual count by far in at least a decade, she said.
As of March, Minnesota utility customers collectively were $150 million behind on their utility bills, adding to what Levenson-Falk characterized in a Wednesday interview as a multifaceted affordability crisis challenging lower-income folks.
“You’re seeing increasing divides between people who can pay their bills and those having trouble,” she said.
Energy Innovation’s modeling showed Minnesota industrial businesses would be even harder-hit by the GOP budget. They face a 46% increase in electricity bills by 2034.
Though Minnesota has not had a front-row seat for the manufacturing boom spurred by the Biden-era climate law that the GOP budget all but repeals, Energy Innovation’s modeling raised the specter of tens of thousands of job losses due to “decreased investments in clean energy projects…from lower demand for the inputs to those projects, and (indirect job losses) from lower induced economic activity.”
Those include jobs manufacturing high-efficiency appliances at local factories run by companies like Trane Technologies and Daikin; installing those appliances in homes and businesses; weatherizing existing buildings; and building new homes to modern efficiency standards. These employees, whose work helps Minnesotans save millions on their utility bills each year, account for three in four “clean energy” jobs statewide, said Gregg Mast, executive director of Clean Energy Economy Minnesota, in an interview Wednesday.
“The bill in its current form is certainly a job killer and is undermining one of the fastest growing sectors of our economy,” Mast said.
The small, independent installation businesses that dominate Minnesota’s growing solar sector will also suffer under the GOP budget, Mast said. Consumer demand will drop due to the loss of a tax credit for residential solar arrays, but perhaps even more significantly, contractors will face “the loss of a decade of certainty on the federal policy side,” he said.
Minnesota’s mandate to produce electricity from 100% carbon-free sources by 2040 is a faint silver lining in all of this, Orvis said in an interview Wednesday.
Even without federal subsidies, Energy Innovation expects states like Minnesota to build more wind, solar and batteries than states without clean electricity mandates. That buildout will increasingly insulate ratepayers from volatile fossil fuel prices, which make up a significant portion of utility bills, Orvis said.
Still, “this bill makes electricity more expensive everywhere,” he said, pointing to a recent analysis by investment bank Jefferies that sees grid-scale solar farm construction nearly doubling in cost in the coming years.
Mast agreed.
“The Trump administration has warned of an energy crisis, and this bill is helping to create one by putting up roadblocks to deploying clean and affordable energy,” Mast said.
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https://minnesotareformer.com/2025/07/03/gop-budget-to-raise-minnesota-household-energy-bills-by-28-analysts-say/
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