An analysis released by the Energy Information Administration (EIA) on September 11, 2024, found that the change in average residential electricity prices in the US mirrored the rate of inflation over the past decade between 2013 to 2023. [1] The average retail price of electricity in the residential sector went from 12 cents per kilowatt hour kilowatt hour (kWh) to 16 cents per kWh in 2023 without adjusting for inflation. The proposed utility rates for utilities must be approved by the public utilities commissions, which often involves evaluating cost increases against increases in the Consumer Price Index (CPI) as a potential justification for the increasing revenue needs on behalf of the utility. This could be a potential cause for the rising rates. Other potential causes include growing investment in transmission and distribution, rapid changes in other commodities prices, and higher investment costs for new generation technologies. Price hikes occurred fastest in New England and California, and prices fell in the midcontinent, especially in Utah and Nebraska. Utah and Nebraska’s access to diverse local energy sources, such as natural gas, coal, wind, and solar, may have helped maintain their low prices despite the growing demand. The states also enjoy well-developed transmission infrastructure, sufficient excess capacity, and low population densities.
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