Tens of millions of Americans are facing higher utility bills following a wave of rate hikes approved in 2025, adding financial strain to households already grappling with energy costs. According to an analysis by Powerlines, regulators green-lit 43 rate increases across the country last year, totaling $11.6 billion.
The vast majority of these hikes have already taken effect, with eight more slated to go live in the coming months. Powerlines estimates that 56 million Americans will see higher utility bills as a result. Utilities are increasing rates to cover the costs of repairing and replacing aging infrastructure, responding to extreme weather events, navigating volatile fuel prices, and meeting the growing demand for electricity, particularly from data centers.
“We’re calling this the new politics of electricity, where electricity is the new eggs,” said Charles Hua, the executive director of Powerlines, drawing a parallel to the soaring price of eggs in 2024 and 2025 and the consumer frustration it caused.
Southern States Hit Hardest
While the impact of these rate hikes will be felt nationwide, residents of southern states are bearing the brunt of the increases. Utilities in the region requested 13 rate hikes, with regulators approving increases totaling $8.4 billion. A particularly contentious case involves Florida Power & Light, which is seeking approval for rate increases that would cost Floridians billions of dollars in additional utility expenses in the coming years.
Powerlines tracked a total of 83 rate requests in 2025, with 38 still pending and two having been rejected. If all pending requests are approved, over 80 million Americans could be affected by higher utility bills.
A Broader Trend of Rising Costs
These rate hikes come as many Americans are already struggling with high energy costs. Around one in three Americans reported having to forgo a basic expense in 2024 to afford their energy bills, according to a LendingTree analysis. As of November 2025, the average American household was paying approximately $250 per month for utilities.
The reasons behind the rate increases vary by location. In California, wildfires have been a major driver, while in Georgia, factors like extreme weather events and the Vogtle nuclear plant have contributed to higher bills. Power-hungry data centers are also playing a role, though the extent of their impact varies depending on the local electricity market and regulatory environment.
The White House and Congress have called on big tech companies to help cover the costs associated with new artificial intelligence plants, with some companies, including Meta and Google, already offering commitments to absorb those costs.
Looking Ahead: Continued Increases Expected
The U.S. Energy Information Administration predicts that residential electricity prices will rise nearly 4% in 2026. Americans spent an average of $1,833 on electricity bills in 2024. Wholesale electricity prices have surged in recent years due to increased demand from electrification, manufacturing, and data centers.
While residential natural gas prices are expected to dip in the coming years, experts caution that they will likely remain volatile. A recent winter storm caused global natural gas prices to rise, settling at nearly $7 per MMBtu on January 27, 2026 – the highest level since December 2022. However, experts believe short-term spikes are unlikely to immediately impact individual utility bills, as utilities typically hedge against price fluctuations months in advance.
