Widespread narratives about rapidly rising electricity rates across the US have been interpreted as indicative of a broader national trend, but this characterization may be incomplete.
In this analysis prepared for the Edison Electric Institute, authors Matthew DeCourcey and Mayank Saraswat evaluate recent retail electric rate trends, identify regional variations and explain the drivers behind rate increases using data from the US Energy Information Administration and utility financial reports.
The analysis focuses primarily on residential electric rates to inform policymakers about rate trends.
Key findings:
- Rate increases have been concentrated in specific regions – the Northeast due to wholesale electricity market price increases, and California due to wildfire-related costs.
- Most areas have experienced stable rates, with utilities effectively managing controllable costs.
- Data centers have generally not caused retail rate increases, with one exception in parts of the PJM region where capacity price increases were driven partly by data center demand.
- Protective large load tariffs and agreements are being implemented to prevent cost shifts to existing customers.
The findings demonstrate that rate trends vary significantly by geography, requiring location-specific approaches rather than broad national solutions to address rate challenges.
