Independent resource. Data sourced from the U.S. Energy Information Administration.
Electricity Rate Trends: 2020 to 2026 and What Comes Next
The national average residential electricity rate has risen from 13.31 cents per kWh in 2020 to 18.05 cents in 2026, a 36% increase over six years. Here is the data, the driving factors, and what projections suggest for 2027 through 2030.
National Average Rate: 2020 to 2026
National average residential rate in cents per kWh. Source: U.S. Energy Information Administration.
What Is Driving the Increase
Grid Modernization
US utilities are investing $80 to $100 billion annually to replace aging infrastructure, bury power lines, install smart meters, and harden the grid against extreme weather. These capital costs are passed through to ratepayers over 20 to 30 years.
Demand Growth
After decades of flat demand, US electricity consumption is growing again. Data centers (AI, cloud computing) are projected to double their electricity use by 2030. EV adoption adds load. Electrification of heating (heat pumps replacing gas furnaces) increases winter demand.
Energy Transition
Retiring coal plants and building wind, solar, and battery storage requires massive upfront investment. While renewable generation is now cheaper to operate than fossil fuels, the transition capital costs are still flowing through to rates. By the late 2020s, lower operating costs should begin offsetting the investment.
State-Level Trends
Biggest Rate Increases (2025 to 2026)
| State | Rate | Change |
|---|---|---|
| Hawaii | 43.18 | +8.5% |
| California | 27.30 | +7.2% |
| Massachusetts | 28.55 | +7.1% |
| Connecticut | 29.92 | +6.8% |
| New Hampshire | 27.03 | +6.5% |
Most Stable Rates
| State | Rate | Change |
|---|---|---|
| North Dakota | 10.92 | +1.8% |
| Washington | 11.20 | +1.9% |
| Idaho | 10.65 | +2.1% |
| Wyoming | 11.85 | +2.2% |
| Oregon | 12.90 | +2.3% |
2027 to 2030 Outlook
The EIA projects national average residential rates will continue rising at 2 to 4% annually through 2030. At that pace, the national average could reach 20 to 22 cents per kWh by 2030. However, several factors could accelerate or slow this trajectory.
Could Accelerate Increases
- More frequent extreme weather events increasing grid damage costs
- Faster-than-expected data center growth from AI
- Natural gas price spikes from LNG export demand
- Accelerated coal plant retirements requiring expensive grid upgrades
Could Slow Increases
- Solar and wind costs continue falling (already cheaper than new gas plants)
- Battery storage costs decline 50%+ by 2030
- Energy efficiency improvements reduce overall demand growth
- Virtual power plants and distributed energy reduce infrastructure needs
How to Protect Yourself
Lock in a Fixed Rate
Before rates increase further, lock in a 12 to 24-month fixed rate in your deregulated state.
Improve Efficiency
Every kWh you do not use is a kWh you do not pay for at any rate. Efficiency improvements have a compounding benefit.
Use Off-Peak Rates
TOU rates give you access to lower off-peak pricing that may not increase as fast as peak rates.