Forty-Two Percent for Electricity, Twenty-Nine for Everything Else
Lawrence Berkeley National Laboratory reported on April 1 that US retail electricity prices increased 2.5 percent in real terms in 2025, the first time electricity costs have outpaced general inflation after decades of tracking at or below the consumer price index. Since 2019, retail electricity prices have risen 42 percent. The CPI has risen 29 percent.
The thirteen-point gap between those two numbers represents a structural shift in how American electricity markets price growth. For most of the past half-century, adding demand to the grid lowered per-unit costs. Fixed infrastructure expenses spread across more kilowatt-hours meant cheaper electricity for everyone. That dynamic, which E&E News characterized as the historical relationship where new demand lowered per-unit costs by distributing fixed expenses across a larger base, has reversed.
Transmission and delivery charges drive the increase. Heatmap News and MIT launched an interactive Electricity Price Hub on April 1, providing utility-level cost breakdowns across every US ZIP code. The central finding: transmission, distribution, and delivery charges, not generation costs, are the fastest-growing segment of American power bills. Brian Deese, former Director of the White House National Economic Council, described the trend in the accompanying analysis: electricity costs are becoming “a wires story and less of an electrons story.” Residential electricity prices are projected to average 18.02 cents per kilowatt-hour in 2026, up from 17.29 cents in 2025.
Generation costs reflect fuel prices and plant economics, which fluctuate with commodity markets. Delivery costs reflect infrastructure investment, which compounds. Storm hardening, grid expansion for data centers, transformer replacements, and substation upgrades all flow into the transmission and distribution line items on ratepayer bills. These charges do not retreat when natural gas prices fall.
410 gigawatts of filed demand. ERCOT CEO Pablo Vegas disclosed on March 31 that large load interconnection applications have reached 410 gigawatts, up from approximately 150 gigawatts just two weeks earlier. ERCOT’s current peak demand is roughly 85 gigawatts. The applications are not forecasts of what will be built. They are measures of what grid planners must evaluate. Each evaluation requires engineering studies, transmission modeling, and infrastructure cost allocation that enters the rate base whether or not the applicant builds.
On the same day, the Texas Senate Business and Commerce Committee held a hearing examining how regulators and grid operators plan to connect large power users without triggering outages or raising prices for existing customers. The hearing’s explicit focus on protecting “residents and small businesses” from cost-shifting confirms that the allocation question has moved from utility dockets to legislative chambers.
The Dallas Fed is counting kilowatt-hours. A Federal Reserve Bank of Dallas working paper published March 5 estimates that data center electricity consumption will boost headline PCE inflation by 0.05 percentage points in 2026, rising to 0.13 percentage points by 2030 under peak-hour utilization scenarios. BloombergNEF projects that data center electricity consumption will double from 40 gigawatts to 80 gigawatts by 2031. In PJM, data center capacity costs added an estimated $9.3 billion for 2025 and 2026, translating to approximately $16 to $18 per month per residential bill in affected service territories.
The Federal Reserve does not publish working papers on stable cost categories. When a regional Fed bank builds a model quantifying how a single demand sector affects consumer price inflation, electricity has crossed from a utility concern into a macroeconomic variable.
77 tariffs in 77 jurisdictions. The Smart Electric Power Alliance and the NC Clean Energy Technology Center updated their Database of Emerging Large-Load Tariffs to 77 tracked tariffs, up from 65 in November 2025. The database covers approved and proposed rate structures for data centers, large commercial and industrial customers, and cryptocurrency mining operations across PJM, MISO, ERCOT, and CAISO territories. Twelve new tariffs in four months. Three per month. Each one represents a utility redrawing the boundary between who pays for infrastructure growth and who benefits from it.
Rate restructuring is zero-sum accounting. When a utility creates a specialized tariff for a data center with dedicated infrastructure cost recovery, the remaining commercial customers (office buildings, hospitals, hotels, retailers) absorb a different share of common grid costs. The 77 tariffs tracked by the DELTa database are 77 jurisdictions where that reallocation is underway.
Three institutions, working independently within the same quarter, published the same structural finding: US electricity costs have decoupled from general inflation, driven by infrastructure spending that compounds regardless of commodity prices. The thirteen-point gap between electricity and the CPI since 2019 is not closing.
Sources
Electricity Prices Outpace Inflation as Data Centers Proliferate (E&E News)
What Americans Really Pay For Electricity (Heatmap News)
The Fastest-Growing Part of Your Power Bill Isn’t ‘Power’ at All (Heatmap News)
Data Center Boom Expected to Raise Electricity Component of PCE Inflation (Federal Reserve Bank of Dallas)
SEPA Tracks 77 Large Load Tariffs Nationally with DELTa Database (RTO Insider)
Texas Launches $350M Nuclear Fund Ahead of Data Center Boom (E&E News)