U.S. electricity prices continue steady increase

Retail electricity prices have increased faster than the rate of inflation since 2022, and we expect them to continue increasing through 2026, based on forecasts in our Short-Term Energy Outlook. Parts of the country with relatively high electricity prices may experience greater price increases than those with relatively low electricity prices.

Overall, U.S. energy prices rapidly increased from 2020 to 2022 as economic activity recovered after the worst of the pandemic and Russia’s invasion of Ukraine interrupted energy supply chains. Since 2022, nominal prices for many fuels have declined, particularly for those such as gasoline and heating oil that are tied more closely to crude oil prices, which are affected by international markets. Electricity prices, though, have continued a steady increase.

Regions with already high electricity prices may see larger increases

Although we expect the nominal U.S. average electricity price to increase by 13% from 2022 to 2025, our forecasts for retail electricity price increases differ across the country. Residential electricity prices in the Pacific, Middle Atlantic, and New England census divisions—regions where consumers already pay much more per kilowatthour for electricity—could increase more than the national average. By comparison, residential electricity prices in areas with relatively low electricity prices may not increase as much.

Click to read more.