As Catholics, we are called to be stewards of creation and to care for the needs of our families and communities. However, an ongoing crisis in America’s power grid threatens both economic stability and the well-being of countless households. Rising demand, supply chain issues, and new tariffs could make the situation even more challenging, leading to higher electricity costs and potential delays in much-needed infrastructure improvements.
A Struggling Power Grid
Electricity is essential to modern life, and as demand surges—especially with the expansion of data centers and AI technology—our aging power grid is struggling to keep up. One key component, transformers, is in particularly short supply. These devices regulate voltage as electricity travels from power plants to homes, factories, and businesses. “The lack of these components can therefore hold up more power from being brought online,” according to a report from The Wall Street Journal.
Currently, around 55% of in-service distribution transformers are more than 33 years old and nearing the end of their operational life, according to estimates from the National Renewable Energy Laboratory (NREL). In order to meet growing energy needs, transformer capacity might need to increase by 160% to 260% by 2050 compared to 2021 levels. This raises a critical question: how will we afford these essential upgrades?
The Impact of Tariffs on Electrical Equipment
To make matters worse, recent and proposed tariffs could significantly drive up costs. Since 2020, transformer prices have already increased by 70% to 100%, according to The Wall Street Journal. One major factor is the cost of essential materials like electrical steel and copper. The U.S. currently imposes a 25% tariff on steel and aluminum, as well as a 10% across-the-board tariff on imports from China. If further tariffs—including proposed 25% tariffs on imports from Canada and Mexico—go into effect, transformer prices could rise an additional 8% to 9%.
This would create an even greater burden for utilities, which could be forced to pass costs onto consumers. In fact, the New Jersey Board of Public Utilities recently announced that residential electricity bills are expected to rise by 17% to 20% starting in June 2025, partly due to increased energy demand from data centers. Nationwide, electricity prices have already increased at a compound annual growth rate of 5.7% over the last five years.
The Moral Obligation to Affordable Energy
As Catholics, we recognize the dignity of every person and the need for policies that support human flourishing. Pope Francis has repeatedly spoken about the moral implications of economic decisions, emphasizing that financial policies should prioritize the common good over profit. The rising cost of electricity is a significant issue for working-class families and vulnerable populations who may struggle to afford basic utilities.
While reshoring manufacturing and securing America’s energy independence are important policy goals, they should not come at the expense of struggling families. As The Wall Street Journal warns, “Building out America’s AI dominance and reshoring manufacturing are popular policy objectives, but they might come at the cost of perhaps the most popular objective of all—lowering consumers’ bills.”
