Utilities across the U.S. requested a combined $31 billion in rate increases in 2025, nearly double the amount in the previous year, according to an analysis by PowerLines.
More than half of the 83 cases that PowerLines tracked have already been approved by state regulators. Meanwhile dozens are still pending, indicating that millions of customers will continue to see their energy bills rise in the coming years.
Curbing those costs has jumped to the top of politicians’ priority lists, from President Donald Trump to the governors of New Jersey, New York, Virginia, and Indiana — especially heading into a mid-term election cycle. With Americans feeling crushed by the soaring costs of energy, health care, and housing, both Republicans and Democrats are talking about affordability in hopes of winning over voters.
“This is what we call the new politics of electricity,” Charles Hua, CEO of PowerLines, said in a call with reporters about the data. “What used to be for largely insular, grid-nerd type venues is now getting exposure from a wider range of stakeholders.”
The discourse around energy bills took off in 2025, especially after PowerLines’ issued initial reports tallying utilities’ rate requests. Those reports were widely covered by the mainstream press and became talking points for politicians and pundits alike, and coincided with local communities’ concern about the energy and environmental toll of data centers popping up in their towns.
As Hua explained on a September episode of Open Circuit, “four in five Americans feel powerless over these costs. Unlike any other product, you don’t really know how much you’re paying for the product as you’re using it, and so that creates this feeling of frustration from folks where they see their bills spike.”
For more on rising electricity rates, listen to PowerLines CEO Charles Hua’s interview on Open Circuit:
Just in the last two weeks, the Democratic governors of New York and Massachusetts rolled out ratepayer protection plans. A Republican running for governor of Michigan has anchored his campaign in reforming the state PUC.
“That is new, that is remarkable, and that is a level of bipartisan engagement at the policymaker level that is both responding to and creating this new politics of electricity,” Hua said.
What’s driving up costs
A wide range of factors are causing energy bills to rise. Utilities’ requests for rate increases also vary widely by state, and must be approved by PUCs.
One driver is wholesale gas and electricity prices, which are outpacing inflation and are now the largest driver of inflation — surpassing expenses like groceries. This is due in part to surging power demand from data centers, electrification, and new manufacturing plants, as well as more volatile gas prices as the U.S. exports a record amount overseas.
Those prices are just one contributor to the total utility bill customers’ receive, however. There are also other rates and fees charged by utilities, including power generation, transmission and distribution, rebuilding infrastructure damaged by extreme weather, and investing in grid hardening.
The true impact of data centers specifically on customers’ utility bills isn’t fully understood yet. Between 2019 and 2024, the biggest driver of rising rates was utilities’ distribution and transmission upgrades, researchers at Lawrence Berkeley National Lab and the Battle Group found. But that analysis only covered the beginning of the data center boom, and researchers noted that past price drivers are not necessarily predictive of future dynamics; trends could change as data center load growth forecasts surge to unprecedented levels.
In PJM’s capacity auctions last year, prices spiked in part because data centers’ power demands outstripped new generation. And Georgia Power, a subsidiary of Southern Company, projected it will need nearly 10 gigawatts of new capacity to meet future demand from data centers. The estimated cost for those additions is $15 billion.
Meanwhile, Microsoft and OpenAI this month pledged to cover the costs of powering its massive expansion of data centers so local residents don’t have to foot the bill.
States pay for extreme weather
In the Southeast, storm recovery is the main cost driver — particularly in Florida, where Florida Power and Light requested a historic $9 billion rate increase in 2025.
The utility cited population growth, grid hardening to protect against extreme weather, and smart technology that automatically detects and reroutes power to minimize outages. The state PUC ultimately pared the increase down to $5 billion, PowerLines reported.
“These are long-term initiatives and investments,” Manny Miranda, a former executive vice president at Florida Power and Light, said during a panel at Latitude Media’s Power Resilience Forum on Jan. 22.
He said the utility has worked on resiliency projects for two decades, including hardening transmission infrastructure with steel and concrete and undergrounding power lines.
Meanwhile, Duke Energy Florida had its $1.1 billion in storm recovery costs for Hurricane Helene approved. Entergy Louisiana customers are still paying for the recovery from at least six storms, including Hurricane Isaac that hit the region more than a decade ago. And Utah ratepayers are facing a wildfire fund proposal that would increase rates by more than $1 billion over the next ten years.
