Electric rate increases: why they happen and how they are approved
The average residential price over the 12 months to August 2026 was 6.5%3 above the 12 months before, and investor-owned utilities asked regulators for more new revenue in 2025 than at any time since the mid-1980s, according to Lawrence Berkeley National Laboratory. Most of those increases pass through a state commission in a rate case; fuel clauses and riders move bills between cases.
Published November 14, 2026.
The short answer
Electricity prices for homes have risen almost every year this century. The US residential average went from 8.58¢ per kWh1 in 2001 to 17.23¢ per kWh in 2025, and it rose in 21 of the years since 2002; the last annual decline was in 20182. Over the 12 months from September 2025 to August 2026, homes paid an average of 18.04¢ per kWh, +6.5%3 against the 12 months before. These are average revenue per kWh: what residential customers paid in total, fixed charges and riders included, divided by the kWh they used. Lawrence Berkeley National Laboratory's 2026 review of retail prices names the main drivers of the change from 2024 to 2025: fuel and wholesale power, distribution costs, new generation, transmission, storm recovery and capacity prices.
For a customer of an investor-owned utility, an increase in base rates is approved by the state utility commission in a rate case. Changes in fuel and power costs usually reach the bill through adjustment clauses that the commission has already approved. City-owned utilities and many cooperatives set their own prices. In states with retail choice, the supply part of the bill follows its own schedule. The rest of this guide takes those routes one at a time, then shows one recent case in EIA's data.
Four ways a price per kWh goes up
A base rate case. The utility asks the commission for more total revenue to cover its costs and a return on its investment, and the commission decides how much to allow. The California Public Utilities Commission's explainer of a general rate case describes two phases: first the total revenue the utility needs, covering grid upgrades, maintenance, wildfire mitigation, customer service and staffing, then how that amount is divided among residential, commercial and industrial customers.
An adjustment clause. Fuel and purchased power are passed through separately. The Kentucky Public Service Commission describes its fuel adjustment clause as a way to "regularly adjust the price of electricity" for changes in those costs, shown on the bill as a per-kWh surcharge when costs are above the base level and a credit when they are below it. The utility earns no profit on it; Kentucky checks the monthly filings, reviews them in more detail every six months and can reset the base cost in a final review every two years.
A rider. A rider is a separate charge approved for one purpose, such as storm recovery or a specific program. It is usually approved or changed in its own, narrower proceeding rather than a full rate case, and the fixed charges guide shows where riders sit on a bill.
A new supply price. In states where generation is sold competitively, EIA notes that regulators set the prices for transmission and distribution while generation prices are unregulated. The utility's default supply price and any supplier's price change on their own timetable. The price to compare guide explains how to read that number, and the delivery vs supply guide separates the two halves of the bill.
Not every utility goes through the state commission. In Oklahoma, the Corporation Commission sets the prices of the investor-owned utilities through rate cases, but state law keeps city utilities outside its price regulation and most cooperatives have opted out. Wisconsin's commission, by contrast, regulates municipal utilities too. Your utility's page on this site names its type.
Inside a rate case, from filing to order
The steps are similar from state to state; the deadlines are not.
- Notice. In Arkansas, the Public Service Commission's guide to the rate case process says the utility must notify the commission two to three months before it files.
- Application. The utility files its request with testimony and cost data for a test period, past or forecast. California's commission notes that its utilities often develop those forecasts over a year before filing. Where the state requires notice to customers, this is when the "rate increase letter" arrives.
- Investigation. Commission staff examine the filing. Other parties intervene: consumer advocates, the state attorney general's office in some states, large industrial customers, cities, retailers, environmental groups. California's commission says large cases can draw more than twenty intervenors.
- Public comment. Arkansas files letters from the public in the case record and lets members of the public speak at the start of each hearing; California holds public forums across the utility's service area and takes written comments on its online docket.
- Hearing or settlement. Parties cross-examine witnesses at an evidentiary hearing, much like a civil trial in the Arkansas commission's description. Many cases end in a settlement among some or all of the parties, which the commission can accept, change or reject.
- Order. The commission issues a binding order that sets the revenue the utility may collect and the tariffs that collect it. Arkansas must decide within ten months of the filing; in California, a general rate case for a large utility is filed every four years and takes about a year and a half from application to decision.
The new tariff applies from the date the order sets. Because EIA's figures are averages over all residential customers and months, an order shows up gradually: partly in the year it takes effect, fully in the first complete year after.
One case in the data: Kentucky Utilities and LG&E
On February 16, 2026 the Kentucky Public Service Commission issued its orders in the rate cases of Kentucky Utilities and LG&E, which were settled together. It approved, with changes, a settlement signed by the companies and intervenors including the Attorney General's Office of Rate Intervention, industrial customers, the Lexington and Louisville governments, Walmart, the U.S. Department of Defense, Sierra Club and Kroger. The approved residential increases were smaller than the companies first requested. For Kentucky Utilities it was the first request for an increase since 2020. The commission rejected a proposed sharing mechanism and said the requests were to fund infrastructure upgrades and rising costs, including those of severe weather.
EIA's figures show the before and after. From 2024 to 2025, before the order, the residential average of Kentucky Utilities moved from 11.85¢ per kWh to 11.90¢ per kWh (+0.4%), and LG&E's from 12.28¢ per kWh4 to 12.42¢ per kWh (+1.1%5). In August 20263, under the new rates, Kentucky Utilities customers paid an average of 12.50¢ per kWh, +5.8% on the same month a year earlier, and LG&E customers 12.85¢ per kWh, +5.9%6. These monthly figures are preliminary and also include the fuel adjustment, so not all of the change is the rate case.
Source: EIA-861M monthly sales and revenue by utility; EIA, Electric Power Monthly / EIA-861M sales and revenue by state. Residential revenue divided by kWh in each month, as reported to EIA's monthly survey (EIA-861M; months since January 2026 preliminary).
Show the numbers
| Month | Kentucky Utilities (¢/kWh) | kWh per customer | Bill per customer |
|---|---|---|---|
| January 2025 | 11.35¢ | 2,007 | $227.79 |
| February 2025 | 11.65¢ | 1,285 | $149.70 |
| March 2025 | 12.02¢ | 1,045 | $125.67 |
| April 2025 | 12.42¢ | 814 | $101.11 |
| May 2025 | 12.79¢ | 788 | $100.75 |
| June 2025 | 11.66¢ | 1,154 | $134.56 |
| July 2025 | 11.62¢ | 1,442 | $167.50 |
| August 2025 | 11.82¢ | 1,156 | $136.62 |
| September 2025 | 12.19¢ | 904 | $110.13 |
| October 2025 | 12.47¢ | 847 | $105.69 |
| November 2025 | 12.21¢ | 997 | $121.69 |
| December 2025 | 11.79¢ | 1,530 | $180.38 |
| January 2026 | 14.16¢ | 1,853 | $262.42 |
| February 2026 | 12.70¢ | 1,363 | $173.08 |
| March 2026 | 13.20¢ | 947 | $124.93 |
| April 2026 | 13.71¢ | 759 | $104.06 |
| May 2026 | 13.48¢ | 838 | $113.02 |
| June 2026 | 12.96¢ | 1,076 | $139.52 |
| July 2026 | 12.66¢ | 1,338 | $169.50 |
| August 2026 | 12.50¢ | 1,266 | $158.29 |
Indiana has a more recent order. AES Indiana filed its rate case on June 3, 2025, and the Indiana Utility Regulatory Commission approved a settlement with modifications on June 16, 2026, according to the state's consumer counselor. The utility's residential average in August 20263 was 16.79¢ per kWh, +9.6%6 on a year earlier (preliminary).
Annual figures can also show a multi-year plan. The Washington Utilities and Transportation Commission approved a settlement in March 2024 for Pacific Power with one increase from March 2024 and a second from March 2025. The utility's Washington residential average rose from 11.08¢ per kWh4 in 2024 to 14.33¢ per kWh in 2025 (+29.3%5), while its latest-month reading for August 20263 was −0.1%6 on a year earlier.
Why utilities are asking for more
LBNL's review also tracks major rate requests by investor-owned utilities, from S&P Global data. It found that requests filed in 2025 were the largest since the mid-1980s, and that over the last five years commissions approved a larger share of the dollars requested than in the two decades before. LBNL reads that as a signal of further increases in the near term. Its data leave out fuel adjustments, storm recovery and other short-term riders, so they are incomplete.
Fuel was one of those drivers in 2025: the price of natural gas delivered to generators rose +36.0% in 2025 from its 2024 low. In the PJM region, LBNL estimates that capacity costs added 0.9¢ per kWh to average wholesale costs in 2025 and expects a further 0.6¢ per kWh7 in 2026; the PJM capacity analysis follows that through to bills.
Measured over a longer period, LBNL puts the nominal increase in residential prices from 2019 to 2025 at +33.0%. After inflation, the change in the all-sector average price was +3.0% from 2019 to 2025 and −6.0%7 from 2010 to 2025. In the Bureau of Labor Statistics' consumer price index, electricity was up +4.4% in the year to September 2026, against +3.7%8 for all items.
Source: BLS, Consumer Price Index, electricity. Consumer Price Index for all urban consumers, not seasonally adjusted, rebased so January 2019 = 100. October 2025 was not collected (2025 lapse in appropriations), so that month is missing.
Show the numbers
| Month | Electricity index | All items index |
|---|---|---|
| January 2019 | 100.0 | 100.0 |
| July 2019 | 103.9 | 101.9 |
| January 2020 | 100.5 | 102.5 |
| July 2020 | 103.7 | 102.9 |
| January 2021 | 102.0 | 103.9 |
| July 2021 | 107.9 | 108.5 |
| January 2022 | 112.9 | 111.7 |
| July 2022 | 124.4 | 117.7 |
| January 2023 | 126.4 | 118.9 |
| July 2023 | 128.1 | 121.4 |
| January 2024 | 131.2 | 122.5 |
| July 2024 | 134.4 | 125.0 |
| January 2025 | 133.6 | 126.2 |
| July 2025 | 141.8 | 128.3 |
| February 2026 | 140.7 | 129.8 |
| August 2026 | 147.0 | 133.1 |
| October 2026 | 145.9 | 134.1 |
Where increases were largest in the last 12 months
Rate cases, fuel costs and wholesale markets differ by utility and region, and the state averages spread widely. Over the 12 months from September 2025 to August 2026, the residential average rose most in the District of Columbia (+19.8%), New Hampshire (+13.8%) and Maryland (+12.7%). 10 states, counting DC, rose 10% or more, the median state rose +6.1%, and in 2 the average fell, led by Connecticut (−9.0%3).
Connecticut −9.0%District of Columbia +19.8%
Source: EIA, Electric Power Monthly / EIA-861M sales and revenue by state. Each dot is a state. Change between the trailing 12-month average price and the 12 months before it. Period: September 2025 to August 2026.
Show the numbers
| State | Residential change, 12 months |
|---|---|
| District of Columbia | +19.8% |
| New Hampshire | +13.8% |
| Maryland | +12.7% |
| Pennsylvania | +12.3% |
| Washington | +11.9% |
| Ohio | +11.7% |
| Virginia | +11.5% |
| New York | +11.2% |
| Illinois | +10.6% |
| New Jersey | +10.2% |
| Idaho | +9.8% |
| Maine | +9.7% |
| Montana | +9.5% |
| Hawaii | +8.8% |
| Indiana | +8.8% |
| South Dakota | +8.2% |
| Michigan | +8.0% |
| Colorado | +7.9% |
| Mississippi | +7.8% |
| Wyoming | +7.5% |
| Arkansas | +7.2% |
| Nebraska | +7.2% |
| Kentucky | +6.8% |
| North Dakota | +6.6% |
| Oklahoma | +6.3% |
| Delaware | +6.1% |
| Missouri | +6.1% |
| Wisconsin | +6.1% |
| Vermont | +6.0% |
| Kansas | +5.9% |
| North Carolina | +5.5% |
| South Carolina | +5.5% |
| Louisiana | +5.3% |
| Alaska | +5.0% |
| New Mexico | +5.0% |
| Iowa | +4.9% |
| Texas | +4.8% |
| Florida | +4.4% |
| Georgia | +4.4% |
| Minnesota | +4.2% |
| Alabama | +3.9% |
| California | +3.7% |
| Tennessee | +3.7% |
| Utah | +3.5% |
| Oregon | +2.2% |
| Arizona | +1.7% |
| Rhode Island | +1.2% |
| West Virginia | +0.9% |
| Massachusetts | +0.8% |
| Nevada | −0.7% |
| Connecticut | −9.0% |
A state figure blends every utility in it, and a single month can rank states differently. The price increase ranking has every state, and each state page breaks the change down by utility.
What EIA forecasts for 2026 and 2027
EIA's Short-Term Energy Outlook of November 2026 forecasts a US residential average of 18.17¢ per kWh for 2026, partly estimated, and 18.68¢ per kWh for 2027, a forecast rise of +2.8%9. That forecast annual change is smaller than the 6.5%3 rise of the last 12 months against the 12 before. A national forecast cannot see individual rate cases: a utility with an order taking effect in 2027 can rise much faster than the average, and one whose fuel costs fall can go down. The next edition is due December 8, 2026.
Following a rate case for your own utility
- Find out who sets the price. Your utility's page here gives its ownership type. Investor-owned utilities file with the state commission. City utilities usually go to the city council or utility board and cooperatives to their own board, though some states regulate them too.
- Find the docket. Commission websites list open cases by utility. A customer notice, where there is one, gives the case and the hearing dates.
- Translate the request into your bill. Requests are often stated as a dollar change for a typical customer at a set number of kWh. Compare that kWh with your own: the average US home used 874 kWh10 a month in 2025, but your bill shows your own figure for the last 12 months.
- Comment before the record closes. Written comments and public hearing statements go into the case file; the consumer advocate's office, where your state has one, represents residential customers.
- Watch the adjustment lines after the order. A rate case sets base rates; the fuel adjustment and riders keep moving. The why is my bill so high guide separates price changes from changes in use.
If an increase makes the bill unaffordable, help paying your electric bill lists LIHEAP and utility programs.
Rate increase questions
Why are electric rates going up?
Lawrence Berkeley National Laboratory's 2026 review lists fuel and wholesale power costs, distribution spending, new generation, transmission, storm recovery and capacity prices as the main drivers from 2024 to 2025. The price of natural gas delivered to power plants rose +36.0%7 in 2025, by LBNL's count. Which driver matters most depends on the state and the utility.
Will electric rates go up in 2027?
EIA's November 2026 Short-Term Energy Outlook forecasts a US residential average of 18.68¢ per kWh in 2027, against 18.17¢ per kWh for 2026, a forecast change of +2.8%9. It is a national forecast; your utility's price depends on its own rate cases and adjustment clauses.
Can a utility raise rates without approval?
An investor-owned utility cannot change its base rates without the state commission's decision, though in Arkansas, for example, a proposed increase takes effect automatically if the commission does not act within a month of the filing. Fuel adjustment clauses, once approved, change the price per kWh on a set schedule without a new rate case. City utilities and many cooperatives set their own prices through their boards or councils.
How do I object to an electric rate increase?
File a written comment in the case docket at your state commission or speak at a public hearing. Commissions such as Arkansas's add letters from the public to the case file, and California's holds public forums across the utility's service area.
Related guides
Sources
- EIA, Historical state data, monthly sales and revenue 1990-2009; table HS861M 1990-2009.xlsx; 1990-2009, final. www.eia.gov
- EIA, Historical state data, annual sales, revenue and customers; table HS861 2010-.xlsx; 2010-2025, final; released October 7, 2026. www.eia.gov
- EIA, Electric Power Monthly / EIA-861M sales and revenue by state; table sales_revenue.xlsx (EPM Table 5.6.A); January 2001 to 2026-08; months since January 2026 preliminary; released October 23, 2026. www.eia.gov
- EIA-861 annual electric power industry report, 2024 final; table Sales_Ult_Cust_2024; 2024, final (file updated December 3, 2025); released December 3, 2025. www.eia.gov
- EIA-861 annual electric power industry report, 2025 final; table Sales_Ult_Cust_2025; 2025, final; released October 7, 2026. www.eia.gov
- EIA-861M monthly sales and revenue by utility; table sales_ult_cust_2025 and _2026; released October 23, 2026. www.eia.gov
- Lawrence Berkeley National Laboratory, Retail Electricity Price Trends and Drivers; table July 2026 update; 2025 data. eta-publications.lbl.gov
- BLS, Consumer Price Index, electricity; table CPI-U; through October 2026; released November 10, 2026. www.bls.gov
- EIA, Short-Term Energy Outlook, November 2026; table retail prices ESRCUUS, ESCMUUS, ESICUUS; November 2026 edition; 2026 partly estimated, 2027 forecast; released November 10, 2026. www.eia.gov
- EIA-861 2025, average monthly bill by state; table Average_Bill_2025; 2025, final; released October 7, 2026. www.eia.gov
How every figure is built: methodology. Found an error? Write to [email protected]; corrections are listed on the updates page.