U.S. power prices up 40% in five years

U.S. power prices really have jumped over the past five years — but the cleanest version of the claim is closer to one-third than 40%. The most cited new breakdown comes from Lawrence Berkeley National Laboratory and The Brattle Group, which put the 2019-to-2025 increase in residential electricity prices at 33%, from 13 cents to 17.3 cents per kilowatt-hour. That is still a big move. And the important part for investors is that this doesn’t look like a one-off fuel spike that simply snaps back. It looks more like a system getting more expensive to run. ### So what actually went up? Retail electricity prices — the all-in price customers pay on their bills. That includes generation, transmission, distribution, taxes, and other charges. In other words, this is not just the cost of producing power at a plant. It is the cost of getting reliable electricity all the way to the customer. EIA’s own outlook said retail electricity prices have been rising faster than inflation since 2022 and were expected to keep increasing through 2026. (utilitydive.com) ### Is the “up 40%” claim wrong? Basically, it is directionally right but numerically loose. The best-supported national figure I found is 33% for residential customers from 2019 to 2025. Commercial prices rose 26%, industrial 27%, and all-sector average retail prices rose 5.3% in 2025 alone versus 2024. Some advocacy groups round the broader post-2021 jump to “nearly 40%,” but that depends on the series and start date you choose. (eia.gov) ### Why didn’t prices fall with natural gas? Because electricity bills are no longer just a fuel story. EIA makes this point pretty clearly — many fuel prices cooled after the 2022 shock, but electricity kept climbing. The reason is that utilities are spending heavily on the wires-and-poles side of the business, plus new generation, grid software, storm hardening, wildfire mitigation, and storage. (utilitydive.com) Those costs move through rate cases slowly, but once they land, they stick around. ### How big is the grid-upgrade piece? Big enough to matter nationally. EIA showed total utility spending to produce and deliver electricity rose to $320 billion in 2023 in real dollars, with capital investment doing most of the work. Transmission spending nearly tripled from 2003 to 2023, reaching $27.7 billion. Distribution and other delivery upgrades have also been rising as utilities replace aging infrastructure and add smarter equipment. (eia.gov) ### Why is this getting worse now? Demand is back. For years, U.S. electricity demand was pretty flat. Now utilities are planning around data centers, electrification, new factories, and population growth in some regions. That means more substations, more local distribution work, more transmission, and more reserve margin. The awkward part is timing — utilities spend first, then ask regulators to let them recover the money later through bills. (eia.gov) ### Who gets hit hardest? Households feel it first, but electricity-heavy businesses care a lot too. Crypto miners, data centers, aluminum, chemicals, and other power-intensive operators live or die on delivered power costs. Even if they buy at wholesale-linked rates, they still care about congestion, transmission charges, and local capacity tightness. Regional differences matter a lot here — California, the Northeast, and parts of the Mid-Atlantic have seen especially sharp pressure. (bipartisanpolicy.org) ### Why do investors care now? Because the next leg looks regulatory, not cyclical. The LBNL-Brattle work flagged record investor-owned utility rate increase requests and said approvals from 2021 to 2025 suggest more near-term price increases without policy changes. That is good for some regulated utilities’ rate base growth. But it is a headwind for power-hungry customers whose margins depend on cheap electricity. (utilitydive.com) ### Bottom line? The broad call is real — U.S. electricity got a lot more expensive in the last five years. But the strongest national number is about 33% for residential rates from 2019 to 2025, not a clean 40%. The bigger story is why: the grid is being rebuilt, demand is rising again, and those costs are now showing up on bills. (utilitydive.com)