Retail electric rate increases outpace inflation with prices set to rise higher

Electric rates are climbing faster than inflation, and a new analysis suggests more increases are coming. From 2024 to 2025, U.S. electric rates rose 2.6% after adjusting for inflation. Since 2019, residential rates are up 33% in nominal terms. Utilities requested $18 billion in rate hikes in 2025, and regulators approved 64% of the dollar value of these requests between 2021 and 2025 — a pattern that points toward continued price pressure.

The increases are not even across the country. California, Maine, New York, New Jersey, Massachusetts, Maryland, Connecticut and Rhode Island have seen the steepest inflation-adjusted rate increases since 2019. In California, much of the cost comes from utilities spending on wildfire-related infrastructure work. In Maine, storm repairs, a fast-growing community solar program and higher natural gas prices all pushed rates up. Some places saw relief instead: Hawaii ratepayers got a break from updated fuel contracts, and North Carolina benefited from federal tax credits for nuclear power plants.

Despite the increases, electric bills as a share of income remain near historic lows nationally, and burdens actually fell in 23 states since 2019. But that trend has reversed somewhat since 2023, especially for lower-income households — one in three households earning under $50,000 a year now spends at least 5% of its income on electricity. Since rates and trends vary so much by state, it's worth checking what is happening with rates and any assistance programs where you live.