Why electricity prices are surging for U.S. households
Kilito Chan | Moment | Getty Images
Even if the general inflation has cooled, electricity prices are rapidly increasing for US households.
According to the Consumer Price Index for May 2025, electricity prices increased by 4.5% last year – almost twice the inflation rate for all goods and services.
US Energy Information Administration It is estimated in May He said that this retail electric prices will leave inflation behind until 2026. Prices have increased faster than 2022 than 2022, he said.
“This is a very simple story: the story of supply and demand, Dav said David Hill, Vice President of Energy at the Bilateral Policy Center and former Vice President of the US Energy Department.
Economists and energy experts, there are many contributing factors, he said.
The high level of growth in electricity demand and the deactivation of facilities that produce power leaving behind the velocity of new electricity generation on the electricity network.
Prices Regional
According to the EIA, US consumers spent an average of $ 1,760 electricity in 2023. Federal Data From the Bureau of Statistics.
Of course, it can cost It changes a lot It is based on where consumers live and electricity consumption. According to the EIA, an average US household paid about 17 cents per cents per kilowatt hour electricity in March 2025-but in March 2025, approximately 17 cents electric in North Dakota in the electric hour-North Dakota, about 41 cents per kwii per kWh in Hawaii. data.
Experts, certain geographies of households will see that electricity bills will rise faster than others, he said.
According to the EI, housing electricity prices in the Pacific, Middle Atlantic and New England regions-areas where the weightattists pay more per kilowatt for electricity may increase more than the national average.
“Electricity prices are determined regional, globally, like oil prices are not determined,” JP Morgan Private Bank senior market economist. He said.
EIA expects the average retail electric prices to increase from 2022 to 2025%.
According to the CNBC analysis, the average household’s annual electricity bill may rise from about $ 219 to $ 1.902 in 2022 in 2025. Federal Data. It assumes that their uses have not changed.
However, household prices will increase by 26% at that time. 21 cents Kilowatt per hour, EIA predicts. Meanwhile, households in the Western North Central Region will see that prices increase by 8% in this period.
However, experts said that some electrical trends are realized not only regional, but also throughout the country.
Data Centers ‘Energy Open’
The QTS Data Center Complex developed on October 17, 2024 in Georgia, Fayetteville.
Elijah Nouvelage | Bloomberg | Getty Images
According to Jennifer Curran, Senior Vice President of Planning and Operations in MidContinent Independent System Operator, the increase in electricity demand due to an increase in energy efficiency was “minimal” in recent years. expressed In a home energy hearing In March. (Miso, a regional electric network operator, serves 45 million people in 15 states.)
Meanwhile, the US “electrification” was swollen with the use of electronic devices, smart home products and electric vehicles.
Experts, now, the demand is ready to increase in the coming years and data centers made an important contribution, he said.
Data centers are wide warehouses of computer servers and other CT equipment that strengthen cloud computing, artificial intelligence and other technology applications.
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The use of the data center electricity rose to 176 Terawatt-Saat in decades until 2023, in accordance with US Energy Department. The agency is expected to be double or double by 2028.
The energy department is expected to consume up to 12% of total US electricity by 2028.
“Open energy, Cur Curran said. Authority, demand increase was “unexpected” and largely due to artificial intelligence support, he said.
The US economy will consume more electricity to process data in 2030 rather than the production of all united energy intensive goods, including aluminum, steel, cement and chemicals. in accordance with To the International Energy Agency.
Permanent electrification between experts, businesses and households is expected to increase electricity demand.
The US has moved away from fossil fuels such as coal, oil and natural gas to reduce the greenhouse gas emissions of the planet.
For example, more households can use electric vehicles instead of gasoline-powered vehicles or electric heat pumps, and the gas increases the general demand for the electricity network, which is efficient technologies against the oven.
BPC’s Hill, population growth and crypto currency mining mining also contribute to a intensive activity.
‘About the infrastructure’
Thianchai Sitthikongsak | Moment | Getty Images
As the demand for electricity increases, the US said that it was experiencing problems according to the infection and distribution of power.
Increased electricity prices “at this point is completely about infrastructure,” he said. “Grill is old.”
For example, the transmission line enlargement “stuck in a routine” and Energy Department targets for 2030 and 2035, JP Morgan Asset & Wealth Management for the Market and Investment Strategy President Michael Cemalast wrote in a March energy report.
Cemalast is another obstacle to the scarcity of transformer equipment with up and down voltages on the US grille. Delivery times are about two to three years and about four to six weeks in 2019.
“Half of all US transformers are close to the end of their useful lives and will need to be changed with changes in areas affected by hurricanes, floods and fires,” Cemalast said.
Transformers and other transmission equipment have experienced the second highest inflation rate among all wholesale goods in the USA since 2018.
Meanwhile, some facilities, such as old fossil fuel -powered plants, were excluded from the service, and instead, the new energy capacity is relatively slow to be online. Authorized, equipment and labor prices are also inflation, so it costs to build facilities more expensive, he said.
