Electricity is up 7.3% in a year and 40% since 2021

Residential electricity rates rose 7.3% between April 2025 and April 2026. The average residential cost was projected to rise 10.5% over the summer.

Step back and the line is steeper: retail electricity prices are up nearly 40% since 2021, including a 7% rise in 2025 alone.

Why this compounds differently than other prices

Electricity is not discretionary and it is hard to substitute. When groceries rise, a household can trade down. With power, the room to adjust is thermostat settings and not much else — and in a heat wave, that room closes.

That is why a 7% electricity increase does more damage to a tight budget than a 7% increase in most other categories.

Where the increases come from

Three things, in rough order of how much they are argued about:

• Grid investment. Transmission and distribution build-out gets recovered through rates, over years.
• Fuel costs. Passed through, and volatile.
• Demand growth, including data centers — genuinely disputed as to how much of the increase it explains.

The number that is not an average

Electricity is priced regionally. A national figure is a useful trend line and a poor guide to your bill. Your rate is set by your utility, in a proceeding before your state commission, and it can move very differently from the national average in the same year.

The document that tells you what actually happened to your rate is your utility’s rate case filing, not a national headline.

Questions people ask