From CNBC: 2025-06-21 05:30:00

Electricity prices are on the rise in the U.S., with a 4.5% increase in the past year, nearly double the overall inflation rate. Factors like electricity demand growth and power-generating facility deactivation are outpacing new electricity generation, leading to higher prices, experts say.

U.S. consumers spent an average of $1,760 on electricity in 2023, with costs varying based on location and consumption. Prices could continue to rise, with the average household’s annual electricity bill expected to increase by $219 in 2025. Certain regions will see larger price hikes than others, experts predict.

Data centers are contributing to the surge in electricity demand, with electricity use tripling to 176 Terawatt-hours in the past decade. Data center electricity consumption is projected to double or triple by 2028, accounting for up to 12% of total U.S. electricity usage. Continued electrification and support for artificial intelligence are driving this growth.

As electricity demand increases, the U.S. faces challenges with outdated infrastructure for power transmission and distribution. Shortages of transformer equipment and slow growth in transmission lines are hindering the efficient delivery of electricity. Aging facilities and delays in equipment replacement are contributing to rising costs and infrastructure issues.

Read more: Why electricity prices are surging for U.S. households