Millions of Americans face higher utility bills as dozens of rate hikes take effect
Tens of millions of Americans are facing higher utility bills after regulators approved dozens of rate hikes last year.
Regulators have given the green light to 43 rate hikes across the country in 2025, totaling $11.6 billion in increases, according to a PowerLines analysis. The nonprofit, which focuses on reducing utility costs, said the vast majority of hikes have already taken effect, while eight are expected to be implemented in the coming months.
A total of 56 million Americans will see their utility bills increase, according to PowerLines, adding new financial pressure on consumers at a time when energy costs are already high. major headache. Utilities are raising rates to fund the repair and replacement of ailing infrastructure, costs related to extreme weather events, fuel price volatility and increased electricity demand, driven largely by data centers.
Consumers absorb the cost of rate increases, as well as utility operating and infrastructure costs, in their monthly utility bills, according to PowerLines.
“We call it the new electricity policy, where electricity is the new eggs,” Charles Hua, executive director of PowerLines, said at a press briefing last Wednesday, referring to the soaring egg prices in 2024 and 2025, it has become a focal point of consumer frustration regarding grocery costs.
Where are rates increasing?
Although the impact of rate hikes will be felt across the United States, it’s residents of southern states who will bear the brunt, according to PowerLines data. The region’s utilities have requested 13 rate hikes, with regulators approving increases totaling $8.4 billion.
This includes a highly contested project rate increase by utility company Florida Power & Light, which is asking Floridians to pay billions of dollars in additional utility costs in the coming years.
PowerLines has compiled a total of 83 rate applications in 2025, of which 38 are still pending and two of which have been rejected. If the pending applications are approved, more than 80 million Americans could face higher utility bills, according to the analysis.
Exorbitant costs
The new round of rate hikes comes as Americans are already grappling with soaring energy costs. About one in three Americans reported having to forgo paying a basic expense in 2024 to pay their energy bills, according to a LendingTree analysis of U.S. Census Bureau Household Survey data.
As of July 2025, Americans paid an average of about $250 a month for their utilities, according to data released last year by the Century Foundation, a progressive think tank, and the advocacy group Protect Borrowers.
The reason for a rate hike will likely depend on where you live, Hua said.
“In California, wildfires have been by far the biggest factor.” Hua said last week. “In Georgia, events like extreme weather events or the Vogtle Nuclear Power Plant were the primary driver of the increased utility bills that people ultimately experienced.”
Energy-hungry data centers are another culprit, although the impact of these installations on a given customer’s utility bill is nuanced, according to Hua.
“It differs greatly based on geography, electricity market structure, and state utility regulatory paradigm and actions to be taken. [public utility commission] assumes this competence or not,” he said.
To ease consumer concerns, the White House and Congress have called on big tech companies to foot the bill for new artificial intelligence factories, with some, like Meta and Google, committing to absorb the costs.
Status of natural gas and electricity prices
Higher utility bills could continue to be a problem for Americans, especially as electricity prices are expected to continue to rise this year.
The U.S. Energy Information Administration projects that residential electricity prices will rise nearly 4% in 2026. Because electricity rates vary by state, prices vary depending on where you live.
Americans spent an average of $1,833 on their electricity bills in 2024, according to PowerLines. The nonprofit said wholesale electricity prices have increased in recent years due to growing demand for electrification, manufacturing and data centers.
Residential natural gas prices are expected to decline in coming years, according to an EIA projection, potentially providing some relief.
Although the price of natural gas is expected to decline overall over the next few years, it will likely remain volatile, experts told CBS News. Take it recent winter stormwhen global natural gas prices rose due to a surge in demand. Natural gas futures settled at nearly $7 per MMBtu (British thermal unit) on January 27, the highest level since December 2022.
“Heating demand was significantly higher and electricity demand increased significantly, bringing natural gas-fired generation to a very high level for this time of year,” Matthew Palmer, executive director and head of gas research for the Americas at S&P Global Energy, told CBS News in an email.
Weather events can increase demand for natural gas, but they likely won’t impact utility bills in the short term, experts say.
“Short-term spikes are unlikely to impact people’s utility bills because much of what they consume is covered months in advance by utilities,” Eric McGuire, research director at Wood Mackenzie, an energy research firm, told CBS News. “That being said, if prices remain elevated or we see continued volatility, this could impact the prices they pay in the future.”
