House Panel Debates Energy Costs for Small Business

A U.S. House subcommittee held a hearing on September 2 to examine how rising demand for energy, water, and infrastructure could affect small businesses. The hearing, titled "Fueling The Golden Age: Future Resource Needs And Small Business Opportunity," featured witnesses debating energy costs and policy responses.

Trevor Higgins of the Center for American Progress cited a survey finding 80 percent of small business owners say energy costs significantly affect their operations. The same share reported their energy costs had increased over the previous three years. The hearing occurred as wholesale power costs in the PJM regional market increased nearly 76 percent in the first quarter compared to a year earlier.

The Cost Pressure on Businesses

Higgins argued that Trump administration policies have compounded cost pressures. He pointed to restrictions on wind and solar development, changes to clean energy tax incentives, and tariffs on materials used in grid equipment. He testified the administration sought to block new offshore wind projects and spent nearly $4 billion in agreements encouraging developers to abandon clean energy projects.

Higgins also stated that changes enacted through the One Big Beautiful Bill Act eliminated more than half of the new electricity generation capacity projected through 2035. He cited analysis estimating those changes could increase commercial electricity rates by 12 percent by 2035. Global factors added to the problem. Higgins testified that gasoline prices were 30 percent higher and diesel prices were 52 percent higher than a year earlier, attributing a significant portion of the increase to the war in Iran.

A Policy Disagreement Emerges

The hearing exposed a sharp disagreement over how federal energy policy should respond. Rep. Kelly Morrison (D-MN), the ranking member, criticized the administration's policies on tariffs and renewable energy restrictions. Ted Ellis, deputy director of Energy & the Environment at the America First Policy Institute, defended an approach focused on expanding domestic energy production and ensuring reliability.

Subcommittee Chairman Rep. Jake Ellzey (R-TX) framed the discussion around growing demand from manufacturing and emerging technologies. "Small businesses depend on reliable and affordable electricity and water," Ellzey argued, stating policymakers should ensure infrastructure expansion costs "do not fall unfairly on Main Street businesses."

Higgins called for additional transmission infrastructure and new generation resources like wind, solar, and nuclear. He argued that restricting lower-cost generation during rising demand would increase costs.

Data Centers and Future Demands

The hearing highlighted data centers as a major emerging source of electricity demand. Higgins testified that data center electricity demand grew nearly 150 percent between 2014 and 2022 and could grow another 300 percent by 2030. He called for data center developers to cover the upfront infrastructure costs for connecting to the grid.

Ellzey similarly pointed to state policies under consideration that require large electricity users to pay for the infrastructure upgrades they trigger. The aim is to prevent those costs from shifting to households and small businesses. Another House subcommittee held a related hearing the same day on natural gas bans and costs.