U.S. utilities have requested or secured a record-setting $29 billion in rate increases in the first half of 2025. That’s more than double the price of hikes this time last year; in the first half of 2024, utility rate increase requests and approvals reached $12 billion.
The unprecedented wave of requests, documented in a recent analysis by the energy regulation-focused nonprofit PowerLines, underscores the myriad pressures facing the energy sector this year. These include the demands of an aging grid, massive demand increase from data centers, impacts of extreme weather, and sharp increases in wholesale market costs.
The number of customers impacted has also increased drastically over last year. This year’s hikes will impact around 40 million customers nationwide.
Nearly half of customers impacted by the hikes — 19.6 million — are in the U.S. South, where utilities have requested a combined $1.8 billion in rate increases.
But it’s consumers in the West who will be particularly impacted by the increases in the year’s second quarter, with over $4 billion of the total $9 billion requested or approved impacting that region. Utilities there requested increases citing aging infrastructure in response to extreme weather and natural disasters. PowerLines estimates that 9.6 million consumers in that part of the country will be impacted.
The vast majority of that regional total stems from a request by Pacific Gas and Electric to increase rates by $3.1 billion for wildfire resilience and infrastructure across 5.5 million customers in California. The utility said in its March filing with the state’s Public Utility Commission that policy uncertainty stemming from the Trump administration, and the fate of its Department of Energy loan specifically, is also contributing to the need for higher rates.
The rate increase requests evaluated by PowerLines, however, were made before the GOP’s megabill was signed into law in early July. The so-called “One Big Beautiful Bill” makes massive cuts to clean energy and is itself expected to have significant impacts on energy availability and costs.
Thanks to the law’s early phase-out of tech-neutral tax credits, analysts expect new generation capacity to be cut by 340 gigawatts by 2035. And in part because of that decrease in capacity, both wholesale electricity prices and household energy bills are expected to skyrocket. The think tank Energy Innovation estimates that wholesale electricity prices will increase 25% by 2030 and as much as 74% by 2035, for a total cost of $235 billion in that year; that’s a $90 billion jump attributable to the new law.
Meanwhile the REPEAT project, a joint initiative between Princeton University and Evolved Energy Research, estimates consumer energy costs will increase by around $165 per household per year in 2030, and $280 by 2035.
