Trump Promised To Cut Your Energy Bill In Half - Why Are Costs Still Surging?

Americans were promised cheaper energy. Instead, they're getting higher bills — just as a brutal winter tightens its grip.

Natural gas prices are surging at a historic pace, utilities are approving rate hikes, and households are bracing for higher heating and electric costs nationwide. The spike comes despite President Donald Trump‘s pledge on the campaign trail to cut U.S. energy prices in half — a reminder that energy markets often respond less to political promises than to weather, infrastructure limits and global supply dynamics.

• State Street Energy Select Sector SPDR ETF (NYSE:XLE) is climbing. See the chart and price action here. 

What’s At Stake?

Energy prices are rising, impacting most Americans but mostly low- and middle-income families, according to Mark Wolfe, executive director of the National Energy Assistance Directors Association (NEADA).

“These increases may be an inconvenience for higher-income households, but for low- and middle-income families they are devastating," Wolfe said in a Jan. 20 report. “Millions of households that were getting by are now being driven into utility debt and toward shutoffs because they cannot afford to keep their homes warm.”

Home heating costs are projected to rise 9.2% this season, the NEADA projects. That’s more than three times the rate of inflation, as higher electricity and natural gas prices collide with colder-than-average weather.

In Detroit, for example, wind chills are expected to drop to -25°F on Saturday, Jan. 24. High temperatures will stay far below normal, reaching only 9°F on Saturday, and 16°F on Sunday, compared with the January average of 32.3°F

The average U.S. household will spend roughly $995, up $84 from last year, with electric-heated homes seeing the steepest jump at 12.2%, and natural gas households up 8.4%. Heating oil and propane users are seeing smaller changes, as lower fuel prices offset the chill.

Is Extreme Cold Overwhelming The System?

Basically, yes. Short-term energy prices are largely governed by physics, weather and markets — not executive orders.

• The U.S. is experiencing an exceptional cold wave across roughly 40 states, pushing heating demand sharply higher.
• Natural gas fuels about 40% of U.S. electricity generation and heats more than half of American homes.
• When temperatures plunge, gas demand spikes simultaneously for homes, power plants and industry.

That sudden, synchronized demand is why Henry Hub futures surged past $5 per MMBtu — an extraordinary weekly move.

The Trump administration’s anti-renewable policies can exacerbate this by forcing heavier reliance on volatile fossil fuel markets, rather than mitigating peak demand with solar, wind, or storage. Just yesterday, the Energy Department confirmed it was either revising or outright canceling more than $83 billion in loans for clean energy technologies.

Natural Gas Supply Can't Ramp Up Overnight

Despite record U.S. production, natural gas is not infinitely flexible.

• Wells take time to drill and complete.
• Pipeline capacity is fixed in the short term.
• Storage withdrawals accelerate in extreme cold, tightening markets quickly.

Who Benefits From Higher Prices?

• Cheniere Energy (NYSE:LNG)
• TotalEnergies (NYSE:TTE)
• Freeport LNG (NASDAW: FLNG)
• ExxonMobil (NYSE:XOM)
• Chevron (NYSE:CVX)

Natural gas prices follow a boom-and-bust cycle typical of commodity markets. When prices rise, producers drill aggressively, boosting supply. Eventually, the market becomes oversupplied, prices fall, and unprofitable projects are shut down.

Over one to two years, reduced production combined with recovering demand pushes prices back up, creating a self-reinforcing cycle. Henry Hub natural gas is a clear example of this pendulum-like behavior.

Infrastructure Bottlenecks Amplify Price Spikes

In many regions, especially the Northeast:

• Pipeline constraints limit how much gas can reach population centers.
• Power grids rely on gas plants that compete with homes for fuel.
• Cold weather increases the risk of equipment failures and outages.

This is why regions like New York and Connecticut often see disproportionately higher costs, even when national supply looks ample.

Utility Rate Hikes Reflect Past Costs

Take Con Edison’s increases approved in New York. In addition to this week's cold snap, factor in:

• Rising labor and maintenance costs
• Grid hardening and climate resilience investments
• Inflation-driven equipment and financing expenses

In the meantime, weather and markets rule.

Global Forces Still Matter

U.S. energy markets are no longer insulated.

• LNG exports link domestic gas prices to global demand.
• Europe and Asia compete for supply during winter.
• Any geopolitical disruption tightens markets further.

To sum up: The U.S. may be energy-rich, but it is not energy-isolated.

In 2024, data show Europe (including Türkiye) remained the top destination for U.S. LNG exports, accounting for 53% of total shipments. Exports to Asia grew from 26% in 2023 to 33% in 2024. Other regions — including the Middle East, North Africa, and Latin America — also saw rising imports, accounting for 14% of U.S. LNG exports, up from 8% in 2023.

Because U.S. LNG exports connect domestic natural gas prices to global markets, higher shipments can tighten local supply and push prices up. Export-related withdrawals can leave less gas for heating and power generation, further increasing energy bills.

Over the long term, higher prices can spur more production, but in the short term, exports can raise costs for U.S. consumers.

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