Electricity prices are rising nationwide and are projected to continue increasing through 2026. The GOP's budget law phases out incentives for adding new renewable power while President Trump campaigned on cutting energy costs. Growth in data centers and wider digitalization, higher temperatures, rising natural gas prices, infrastructure investment, electric vehicle adoption and manufacturing expansion are increasing electricity demand. The Energy Department projects residential costs per kilowatt-hour will increase by over 4% year-over-year in 2025 and similarly in 2026. Political campaigns are using rising utility bills as a central messaging point, and a pro-renewables think tank estimates an annual household cost increase by 2030.
The big picture: Electricity prices and demand have been rising since the pandemic thanks to several forces rowing in the same direction. Think data center growth, wider digitalization of the economy, high temperatures, rising costs for natural gas used in power plants, power infrastructure investment, electric cars, manufacturing growth and more. The Energy Department's independent stats arm projects a year-over-year increase of over 4% in residential costs per kilowatt-hour in 2025, and a similar rise in 2026.
And Republicans counter that the recent budget law will resonate with energy-minded voters. "Democrats have a big job ahead of them connecting to everyday voters that the beautiful bill, and its removing subsidies, is equaling higher energy prices," said Casey Burgat of George Washington University's Graduate School of Political Management. Driving the news: Democratic candidates, campaign arms and allied groups are placing digital and TV ads, billboards and more that hit Republicans over utility bills.
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