The growth of data centers is just one reason

By Mark Huffman of ConsumerAffairs

• U.S. residential electricity prices are expected to keep climbing in 2026, averaging about 18.02/kWh, up from 17.29/kWh in 2025, according to the latest U.S. Energy Information Administration (EIA) forecast.

• Demand is rising fastest where data centers and other large loads are clustering (notably ERCOT/Texas and PJM), tightening regional power markets and nudging bills higher.

• The biggest pressure on bills isnt just fuelits the grid. Utilities are pouring money into transmission, reliability, and storm/fire hardening, costs that often flow through to customers over time.

After two years of inflationary increases, U.S. households should brace for another step up in electricity prices in 2026though the pain will vary widely by region.

The U.S. Energy Information Administrations December 2025 Short-Term Energy Outlook pegs the average U.S. residential price at 18.02 cents per kilowatt-hour in 2026, up from 17.29 cents in 2025.

In higher-cost areas, the forecast shows prices staying elevated and rising further: New England averages about 30.01/kWh in 2026 (vs. 28.97 in 2025), while the Pacific region averages 24.88 (vs. 24.40).

Thats the headline: rates are rising again. The more important story is why.

Supply and demand

A surge in big electricity users is colliding with a grid built for a different era. For most of the 2010s, U.S. power demand was relatively flat. Thats changing quickly.

EIA says power-sector generation growth in 20252026 is being driven primarily by increasing demand from large customers, including data centers, concentrated in regions run by ERCOT and PJM.

In PJM, the data-center boom is no longer an abstract trend lineits reshaping market rules and reliability planning. In December, Reuters reported federal regulators pushing PJM to clarify how very large loads, including AI-driven data centers, connect to the grid, amid concerns about reliability and rising costs.

Fuel costs can still move bills

Even as renewables grow, natural gas often sets the marginal price of electricity in many markets. EIAs latest outlook has Henry Hub natural gas averaging about $4.01/MMBtu in 2026, higher than $3.56 in 2025.

Fuel isnt the whole billdelivery charges matter a lotbut gas-price swings can lift wholesale power prices, and those increases can filter into retail rates depending on how utilities and regulators structure fuel and purchased-power pass-throughs.

The grid buildout shows up in your monthly statement

The fastest-growing slice of many power bills is the wires side: transmission and distribution spending, plus resilience work to keep the lights on during more frequent extreme weather.

A recent FERC winter reliability assessment noted thousands of new transmission projects and pointed to storm and fire hardening and system reliability as the biggest drivers of projected transmission line mileage.

At the same time, FERCs transmission planning and cost-allocation rule (Order No. 1920) is designed to push more long-term regional transmission planningimportant for reliability and new generation, but also a reminder that big builds come with big price tags that must be allocated and paid.

What it means for households in 2026

The national forecast implies another year of upward pressure, not a sudden spike everywhere. But the regional spread is the tell: places already paying morelike New England and the Pacificare projected to remain high, while fast-growth regions facing large-load connections and reliability upgrades could see added upward pressure even if their starting point is lower.

For consumers, the drivers to watch in 2026 wont just be fuel headlines. Theyll be local rate cases, grid upgrade riders, storm-hardening plans, and where the next wave of data centers landsbecause increasingly, the bill is about paying for a more crowded, more complicated, and more resilient electric system.