Leadership1 publisher3 min readPublished
Cost-of-living concerns are driving energy policy fights in toss-up Senate races ahead of November
Senate candidates in Alaska and Michigan are pitching diesel export curbs and gas tax holidays to an electorate where 47% rank cost of living first. The oil and electricity costs behind those pledges look set to outlast November, whoever wins.
The Board Room · Leadership desk
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What happened
- The Cook Political Report rates Senate races in Alaska, Iowa, Maine, Michigan, New Hampshire, Ohio and Texas as toss-ups.
- GasBuddy data show national pump prices up about 46% from January 2025 to late September 2026, with three swing states up at least 50%.
- Electricity in Maine rose 24% from January 2025 to July 2026 against about 15% nationally, and most swing states outpaced the national rise.
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Why it matters
- cost Businesses that run trucks pay a Michigan diesel premium of about $1.79 a gallon on El-Sayed's figures, and the proposed fixes act on taxes and exports while AAA ties the price to crude and Hormuz.
- constraint With the Fed hiking again and more increases possible this year, financing equipment or refinancing debt gets more expensive before the new Congress sits.
- exposure Talarico's wording covers any large energy user, so heavy-load manufacturers as well as data centers are inside the grid cost-allocation debate in a toss-up state.
- precedent Candidates in both parties propose direct intervention in energy markets, so export curbs and grid cost allocation are plausible items for the next Congress whichever party wins.
The cost pressure behind these races is mostly energy. The candidates' remedies work on taxes and trade, while the price is set by crude markets and shipping risk. AAA said in September: "Typically, the start of autumn brings lower gas prices, but lingering volatility in the Strait of Hormuz and the high cost of crude oil are driving up pump prices" [7]. Patrick De Haan, head of petroleum analysis at GasBuddy, said "politicians are now feverishly trying desperate attempts to reduce prices," pointing to gas tax suspensions [8]. He also said relief is limited while geopolitical tensions keep weighing on prices [9].
For a business that runs trucks, diesel is the first cost to model. Abdul El-Sayed, the Democratic Senate candidate in Michigan, said "Michiganders are now paying a staggering $5 a gallon for gas and $6.79 a gallon for diesel" [11]. On his figures, diesel costs $1.79 a gallon more than gasoline there [1]. His Republican opponent, Mike Rogers, wants state and federal gas taxes suspended and a temporary embargo on diesel exports [12]. In Alaska, Republican Sen. Dan Sullivan has pushed for a diesel export ban to bring prices down [10]. Neither export proposal addresses the crude price or the Hormuz volatility that AAA named [7].
Electricity moves more slowly, and the argument there is over who pays for the grid. Maine's rise ran about nine percentage points ahead of the national figure [2]. More than three-quarters of Americans told Consumer Reports in November they were at least somewhat worried data centers would push their bills up [14]. In Texas, one of the seven toss-up states [4], Democratic Senate candidate James Talarico wants to "guarantee large energy users like data centers fund the infrastructure" [15]. His wording is large energy users. A manufacturer with a heavy load fits that description as well as a data center does.
Borrowing is getting dearer at the same time. August's 3.4% is 1.4 points above the Fed's 2% target [3]. The Fed raised rates in September for the first time since 2023, and more increases could come before the year ends [4].
A skeptic would say campaign pledges fade once the votes are counted, and that inflation is already down from its post-pandemic highs [3]. The second point is true. The first misreads where the pressure comes from. The Iran war's effect on oil and tariffs pushed up August's figure [2], and an election settles neither. Several remedies on offer are also direct interventions in energy markets. Republicans in Alaska and Michigan want diesel exports restricted [10][12], and a Texas Democrat wants big power users to pay for grid work [15]. Peltola, Sullivan's Democratic challenger, said he voted "for the war that's making everything more expensive" [17].
The wage half of the planning case is thinner. The coverage tracks fuel and power prices and does not extend to pay. We do not know yet whether wages are following those prices up.
This quarter's decisions concern fuel purchasing and the timing of any borrowing, made while the Fed is still raising [4]. Next quarter brings whatever energy policy the new Congress takes up, and the vote that decides its membership is about a month away [16].
What to watch
- Whether the Fed raises rates again before year end, after its first increase since 2023 in September.
- Whether Sullivan's diesel export ban or Rogers's embargo and gas tax suspension reach a bill after November.
- Whether pump prices follow the usual autumn decline AAA described if volatility in the Strait of Hormuz eases.