The Convergence
Three trends are converging on your electricity bill simultaneously, and none of them are market-driven.
First, coal plant retirements. The EPA's tightened emissions standards have accelerated the closure of coal-fired power plants. Forty-seven gigawatts of coal capacity have been retired since 2022, with another 30 GW scheduled for closure by 2028. Coal currently provides approximately 16% of U.S. electricity — down from 45% in 2010 — but the remaining capacity serves critical baseload and grid reliability functions.
Second, renewable energy surcharges. Twenty-three states have Renewable Portfolio Standards that require utilities to source a specified percentage of electricity from renewable sources. Meeting these mandates requires investment in wind, solar, transmission infrastructure, and battery storage — costs that are passed through to ratepayers as surcharges.
Third, grid reliability spending. The combination of increased renewable penetration, reduced dispatchable generation, and growing electricity demand from data centers and EV charging is stressing grid infrastructure. NERC — the North American Electric Reliability Corporation — has identified reliability risks in two-thirds of the continental U.S. Addressing these risks requires transmission upgrades, reserve capacity investments, and reliability-must-run contracts that keep uneconomic plants operating as backups.
The Bill Impact
The Energy Information Administration projects that average residential electricity rates will increase 8.4% nationally in 2026 — on top of increases averaging 6.2% annually over the past three years. For the median household consuming approximately 886 kWh per month, that translates to roughly $38 per month in additional costs.
In states with aggressive renewable mandates — California, Massachusetts, Connecticut — the increases will be steeper. California's average residential rate already exceeds $0.30/kWh, roughly double the national average, and is projected to reach $0.35/kWh by year-end.
The Policy Choice
Electricity prices are a policy outcome. The decision to retire coal plants faster than replacement capacity can be built is a policy choice. The decision to mandate renewable energy percentages regardless of cost is a policy choice. The decision to restrict natural gas pipeline construction — limiting access to the cheapest dispatchable generation fuel — is a policy choice.
Each of these choices has a cost. And that cost appears on your electricity bill.
To put it plainly: you are paying more for electricity not because the market demands it, but because policy demands it. And the people making those policy decisions do not bear the cost of them.
What Would Help
Extend the operating lives of existing nuclear plants — zero-emission baseload that's already built and paid for. Accelerate natural gas pipeline approvals to reduce regional price disparities. Reform RPS mandates to include cost caps that protect ratepayers. And require honest cost-benefit analysis of emission regulations that accounts for the full ratepayer impact.
Affordable energy isn't optional. It's the foundation of every other economic goal. And right now, policy is undermining it — $38 per month at a time.
