The government is paying billions to keep coal running — and it lands on your power bill

Climate & Energy 4 min 80 sources

Trump has spent $2.7bn paying companies to cancel wind projects and $1.125bn propping up coal, the fuel utilities were already retiring because it costs too much. The check to keep it alive is the story.

Key takeaways

The US government is spending billions to cancel wind projects and keep uneconomic coal plants running — and the cost of propping up the pricier fuel lands on ordinary electricity bills.
Two quieter moves make it durable: a Supreme Court ruling letting the president fire energy regulators, and a climate-skeptic appointed to lead the government's flagship warming report.
The market keeps pulling the other way — falling oil demand, nuclear and fusion IPOs, and a grid whose real bottleneck is wires, not fuel.

Two piles of money are moving in opposite directions, and both point at the same fact.

Paying to stop one fuel, paying to save another

Since March, the Trump administration has spent $2.7bn of public money getting offshore wind projects cancelled, and $1.125bn boosting coal [1]. The Department of the Interior struck four deals with energy companies, paying them to walk away from eight offshore wind projects and pledge to invest in fossil fuels instead [1]. The first, with the French firm TotalEnergies in March, drew a lawsuit from seven Democratic-run states arguing it was an illegal use of taxpayer money [1]. The latest was with Duke Energy last month [1].

Previous presidents have blocked energy projects through permits, lawsuits, or rule changes. Paying developers to hand back leases they already bought is new — there is no precedent for it, according to Jenny Rowland-Shea of the Center for American Progress, a liberal think tank [1].

On the other side of the ledger, the money flows to coal — the dirtiest and most expensive fossil fuel [1]. The Department of Energy set aside $625m in September to “expand and extend the life of” coal plants, then up to $500m more last month to reinvigorate 13 of them and help build a coal export terminal in Oakland [1]. A department spokesperson said the administration is “proud” of the effort, and blamed green-energy subsidies for shutting fossil plants early and pushing prices up [1].

Here is the mechanism the fight is really about. Utilities were retiring coal because newer power — gas, solar, wind — undercuts it. When the cheaper option is winning on its own, keeping the loser running means someone has to pay the difference. That payment doesn’t vanish. It lands on the electricity bill. Critics, including former Washington governor Jay Inslee, say the result is Americans paying twice: higher rates from blocked cheap power, and their taxes funding the coal it protects [1].

Reshaping who referees and who measures

Two quieter moves make the shift durable. On June 29, the Supreme Court ruled the president can fire regulators at independent agencies without cause [17]. Former commissioners from both parties warn it reaches the Federal Energy Regulatory Commission — FERC, the referee for interstate power markets — and could leave it short of the quorum it needs to issue orders, or swinging with each election [17]. “Stripping those agencies of their independence will leave consumers exposed to the worst aspects of competitive markets,” one former chair said [17].

Separately, the White House appointed a geochemist skeptical of mainstream climate science to lead the National Climate Assessment, the government’s flagship report on how warming hits the United States [19]. Change who keeps the score and who calls the fouls, and you change the game without touching a single rule.

The demand side keeps voting the other way

The market pull runs against the policy. Global oil demand is falling as the world electrifies, even as US drivers keep buying more gas [8]. Investors are piling into power: the nuclear firm Holtec filed to go public on Friday, riding an electricity-demand surge tied to AI data centres and government backing for carbon-free energy [9]. A Jeff Bezos-backed fusion start-up is set to become the first of its kind to list publicly [59].

And the grid’s real bottleneck isn’t generation — it’s wires. A draft Energy Department report this week found that transmission congestion, the jams that stop cheap power reaching where it’s needed, added $12bn to wholesale electricity costs in 2024 [34]. The fix it names is more long-distance links between regions [34]. That’s the structural story under the politics: the country needs more power and better connections, whatever fuel wins.

The bill the weather is running up

The other cost is already landing. A study this week estimated that heat and drought are cutting yields of maize, wheat, and soybeans by more than $20bn a year, and warned that could rise roughly eightfold to over $160bn by 2100 unless emissions fall [4]. The researchers, at an Austrian institute, note the biggest financial losses fall on large producers like the US, but the sharpest pain hits the poorest farming nations [4]. It’s one study, not settled fact — but it puts a number on a bill that arrives as higher food prices.

In Spain, wildfires fanned by soaring heat killed at least 12 people this week, some caught in cars as roads turned into traps [63]. A heat dome is set to topple records across the drought-stricken US Plains and West [20]. No single fire or hot week is a trend on its own; together they are the weather the transition is a response to.

Not doomed — just contested

One counterweight. A new report, flagged by the Washington Post’s editorial board, argues America’s clean-energy build is not collapsing despite the subsidy cuts and the pressure on wind [6]. Solar, storage, and cheaper power have momentum that policy can slow but not easily stop. The takeaway isn’t triumph or despair — it’s that the direction and the detour are both real, and the difference between them shows up on your bill.

02 · Lesson · why it matters

Why you only ever have to pay for what can't survive on its own

A subsidy is a confession — nobody props up a winner, and the size of the check to keep something running measures how completely it has already lost.

Two checks, one admission

Watch the money, not the words. On one side, $2.7bn to make offshore wind stop. On the other, more than a billion to keep coal plants breathing. The two checks pull in opposite directions, but they confess the same thing.

You do not pay a fuel to keep running if it can already pay for itself. Utilities were closing coal because newer power undercut it — that was the market reaching a verdict, plant by plant, without anyone announcing it. When a verdict like that goes against something, keeping it alive costs money. The check is what the loss looks like written down.

The market ran the contest first

Prices are a kind of scoreboard. When a solar farm produces a unit of electricity cheaper than a coal plant, the coal plant loses that round — not because someone disapproved of coal, but because the arithmetic went the other way. Do that a thousand times across a grid and old plants start closing on their own.

A subsidy enters after the scoreboard, not before. It is the move you make when the merits have already gone against you and you want the result anyway. That is why nobody writes a check to protect the thing that’s winning. The winning thing needs no protection; it is doing the beating.

Read the size of the check as a thermometer

Here is the part worth carrying. The bigger the payment needed to keep something running, the more thoroughly it has already lost. A tiny subsidy means a close contest. A billion-dollar one means the gap has grown wide.

So when you see money spent to hold something in place, you are looking at a measurement. Not of the thing’s worth — of how far behind it has fallen. The check is a thermometer for a loss that happened before you arrived.

The tool is neutral; who reaches for it tells you where the contest stands

This cuts both ways, and that’s the honest part. Years ago, wind and solar were the ones being propped up — they couldn’t yet beat coal, so subsidies carried them. That, too, was a confession: they were losing on price at the time. What changed is that they stopped needing the help, and now someone is paying to stop them.

The subsidy itself has no politics. It is a lever anyone can pull. But the direction it points is not free of information. The side paying to freeze the result is, almost always, the side losing it on the merits. Whoever has to buy the outcome couldn’t win it.

Who signs, and who pays

The check is written by one hand and paid by another. The government wrote it; the ratepayer pays it, in the higher bill that keeps a costlier plant open. The farmer whose maize yield fell to heat pays a version of it too, in a harvest a study this week valued at $20bn a year and rising. The cost of holding a losing position doesn’t stay with the person holding it. It travels out to people who were never in the room where the decision was made — which now includes you, every time the bill arrives.

And no single seat sees the whole ledger. The president sees a promise kept to an industry. The utility sees an order it must follow. The ratepayer sees a number that went up for reasons no one explained. The verdict of the market, the override that reversed it, the tab the weather is running, and the bill on the kitchen table are one connected thing — but each seat holds only its own corner of it, and mistakes that corner for the whole.

03 · Lab · your turn

The Cost of Holding the Line

Rehearse paying to keep a losing fuel alive and feel the check grow to match how far it has fallen behind.

04 · Hope · carry this

The reason coal costs so much to protect is the same reason it can't be protected forever — the cheaper thing keeps getting cheaper. Verdicts you have to keep paying to override tend, in the end, to stand.