Electric rates across the country
Executive summary
U.S. electricity prices are continuing an upward trajectory through 2026, with the Energy Information Administration forecasting national retail averages near 18¢/kWh and a 4.2% rise in residential rates next year, while wholesale prices climb even faster driven by spikes in regional hubs like ERCOT-North (forecast to jump 45%) [1] [2] [3]. The increase is uneven: some utilities and regions (notably parts of California served by PG&E) are implementing rate cuts or one-off relief even as most states and many cooperatives announce increases tied to higher fuel costs, grid investments and new heavy industrial and commercial loads such as data centers [4] [5] [6] [7].
1. National picture: steady rise outpacing inflation, but numbers vary by metric
Federal analysis shows retail electricity prices have risen faster than general inflation since 2022 and are expected to continue increasing through 2026, with the EIA’s Short‑Term Energy Outlook projecting a national residential average around 18¢/kWh and a load‑weighted wholesale average rising from $47/MWh in 2025 to $51/MWh in 2026 [1] [7]. Independent trackers and think‑tanks echo that residential rates will climb roughly 4.2% in 2026 after a nearly 5% rise in 2025, while some commentators translate EIA scenarios into larger cumulative residential increases over the full 2023–2026 period [8] [9] [10].
2. Regional fault lines: Texas and the Northeast versus some parts of California
Price pressure is highly regional: the West South Central region (including Texas) is expected to account for a majority of U.S. electricity sales growth as data centers and industrial loads expand, and ERCOT‑North’s projected 45% wholesale price jump is the single largest driver of national wholesale increases [3] [7]. By contrast, New England and the Pacific already rank among the highest retail areas—New England is forecast near 30.01¢/kWh in 2026—while parts of California under some utilities’ unique regulatory and accounting moves (PG&E) are seeing modest bill declines for many customers, even as the state’s baseline costs remain high [11] [12] [4] [5].
3. What’s pushing bills up: fuel, demand changes and costly grid work
Natural gas remains the marginal price setter in many markets and EIA forecasts higher average gas prices in 2026, a principal upward lever for power prices; utilities also cite wholesale power cost increases, inflation for equipment, higher interest rates and climate‑driven extreme weather repairs as reasons for rate requests [3] [13] [6] [14]. Layered on that are demand shifts—data centers and cryptocurrency mining concentrated in some regions are materially increasing local demand and prompting large distribution and generation investments that often show up in rates or regulatory filings [7] [15] [14].
4. Winners, losers and policy disputes: who benefits and who pays
Utilities and some regulators frame rate increases as necessary to modernize aging systems and ensure reliability; advocacy groups and analysts warn that rising bills erode affordability and fall hardest on lower‑income households, prompting scrutiny of utility spending priorities and transparency in Public Utility Commission processes [14] [2]. Private vendors and solar/storage sellers position higher retail forecasts as justification for investments and incentives, a commercial angle to watch when interpreting industry commentary [9] [15]. Meanwhile, political actors dispute causes—some emphasize fuel prices and grid spending, others blame industrial demand growth—revealing competing agendas over who should bear upgrade costs [2] [7].
5. What to expect and the limits of current reporting
Expect continued divergence: national averages point upward through 2026 but local outcomes will depend on state regulation, utility rate cases and the timing of large commercial loads and grid projects; some utilities (e.g., PG&E) are able to lower bills for many customers even as the federal forecast shows a broader rise [1] [4] [5]. Reporting so far relies heavily on EIA forecasts and utility press releases and does not uniformly capture distributional impacts on specific customer classes or the precise timing of regulatory decisions in every state, so localized bill impacts will require following state PUC filings and individual utility rate cases for full clarity [14] [6].