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Biden’s fantastical claim of $500 in annual utility savings

(Al Drago/Bloomberg News)

“A dozen CEOs of America’s largest utility companies told me earlier this year that my plan would reduce the average family’s annual utility bills by $500 and accelerate our transition from energy produced by autocrats.”

— President Biden, in an opinion article titled “My Plan for Fighting Inflation,” published in the Wall Street Journal, May 30

This line caught our attention. After all, the typical U.S. family spends $2,060 on average per year for home utility bills, according to the most recent estimate published by So Biden is promising big savings.

But it turns out the White House has been engaging in some inflation of its own.

The Facts

If that $500 figure appears familiar, it’s because you heard something similar in the president’s State of the Union address on March 1. He said his American Rescue Plan would “cut energy costs for families an average of $500 a year by combating climate change.”

That figure was a reference to a report published in October by the Rhodium Group, a research firm. Rhodium predicted that if Biden’s climate change policies were adopted, by 2030 “national average annual household energy costs” would be “roughly $500 lower than under current policy.”

First of all, that’s eight years from now — not a lot of help with the current inflation problem, which was the frame of Biden’s op-ed. But the bigger problem is that “national average annual household energy costs” is not the same thing as household utility bills.

John Larsen, a Rhodium partner and principal author of the report, said the estimate includes both home energy services and the cost of driving. The two elements are roughly equal in terms of energy costs of $4,163 — $2,126 for mobility and $2,037 for home energy. (Note that the home energy element is similar to the EnergyStar estimate.)

But most of the estimated savings, Larsen said, comes from the driving side of the equation. “Of the $495 in savings, $403 comes from mobility savings (spending less money on gasoline either because of more efficient cars or electric vehicles) and the remainder is home energy savings,” he wrote in an email.

Indeed, the report notes that, if the Biden climate plan were adopted, home electricity bills by 2030 would be between one dollar more and five dollars less than under current policy. That might pay for an extra ice cream cone over the summer.

Larsen noted that Biden, in the op-ed, referred to learning this number in a conversation with utility executives, so he did not appear to be referencing the Rhodium report. “I can say that our numbers represent savings across all household energy expenditures and not just those associated with utility bills,” he said.

But when we located the transcript of Biden’s conversation with utility executives on Feb. 9, we found no reference to $500 in utility savings. The figure was also not mentioned in the White House readout of the meeting.

Somehow, as inflation became a hot political issue, the $500 figure that was cited in the State of the Union address appears to have morphed into a reference to utility bills. A May 10 White House release on the “Biden-Harris Inflation Plan,” for instance, called on Congress to pass clean-energy legislation that would “save families an estimated $500 per year on their utility bills.”

Indeed, when we asked the White House for the source of the number mentioned in the Biden op-ed, we received … a link to the Rhodium report.

The Pinocchio Test

The president wrote in an opinion article on his inflation plan — presumably vetted by staff — that utility executives told him “my plan would reduce the average family’s annual utility bills by $500.”

But he didn’t hear that from utility executives.

And the report he is citing is not about household utility-bill savings.

Most of the claimed savings comes from the reduced cost of driving.

And the estimate is for 2030 — when he would no longer be president, even if he served a second term.

Is there any doubt the president earns Four Pinocchios?

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