Extreme weather, rising fuel prices and costly repairs to an aging energy grid have created a trifecta causing electricity bills to creep up nationwide.
Since 2021, electricity prices have increased nearly 40%, with the average household spending more than $1,800 on their bills in 2024. These rising costs have become political, and experts say the power to respond lies with state lawmakers.
“We are experiencing an electricity affordability crisis where 80 million Americans — or one in three households — are unable to pay or struggling to pay their utility bills,” said Charles Hua, founder and executive director of PowerLines, a national energy consumer education nonprofit.
Hua said increasing electricity demand from AI data centers could compound the challenges facing the grid.
President Donald Trump has made “affordability” a focus of his speeches and prioritized the topic in the State of the Union on Tuesday — as the current rate of inflation is 2.4%, slightly above the Federal Reserve’s 2% target.
Due to growing concerns about price, lawmakers in Missouri have proposed bills that would change how monopoly utilities, such as electric companies, operate.
“The issue of rising utility bills started as an energy story in most of 2025, until it very quickly became a consumer and economic story come summer and then in the fall it really quickly became a national political story,” Hua said.
He said electricity prices are now among the fastest drivers of inflation and an unofficial barometer of the rising cost of living.
“Electricity is the new eggs,” Hua said.
The public has taken notice. According to PowerLines polling, more than three in five Americans said rising bills contributed to financial stress, and four in five said they felt powerless to lower those costs.
“Of course, it's helpful to turn off your lights, but at a certain point, a lot of folks have tried that, and that's not leading to lower utility bills because the forces that are driving up utility bills are much more systemic in nature,” he said.
Tools for affordability
Utilities are often called “regulated” or “natural” monopolies — in exchange for being the sole provider of electric or gas service in a specified area, the companies are subject to state oversight. As a result, in most states, customers are not able to switch providers.
These investor-owned utilities across the country, including those in Missouri, have been raising prices to recoup costs of investments in the grid and renewable power plants — as well as the price of fuel.
The amount corporate utilities are able to charge their customers for energy is approved by regulators in each state, such as the Missouri Public Service Commission.
In the past few years, the requests coming across the desks of state utility commissioners have been getting bigger and bigger.
According to PowerLines analysis, investor-owned utilities asked regulators for nearly $31 billion in price hikes last year across the country. That’s more than double the $15 billion requested in 2024.
In the Midwest, Hua said utilities asked to raise prices by a collective $3 billion in 2025, with about half those increases being approved thus far.
A recent report for the Center on Budget and Policy Priorities shows how construction for transmission of power is one of the leading factors contributing to higher costs.
Rachel Jacobson, the organization’s lead researcher for state climate policy, said the people who have power to reign in customer utility costs are those working in state capitols.
“Ultimately, state legislatures also have the ability to direct their public utility commissions to do certain things,” Jacobson said.
Jacobson recommends lawmakers make affordability not just a priority, but a metric that state utility regulators hold energy companies accountable to.
“So much of what influences energy affordability is the decisions that are made by utility companies, and those decisions are governed by public utility commissions at the state level,” Jacobson said.
She said state legislatures can pass a law directing commissions to keep the affordable.
“It will work to the extent that lawmakers are willing to redistribute power to the people and away from corporations," she said.
Jacobson’s colleague and fellow climate policy analyst Mikaela Tajo said rising utility costs often pair with tough choices for low-income families.
“We're seeing households who are having to choose, should I put food on the table or should I turn on the AC to avoid getting a heat stroke in my house?” Tajo said.
Data from the U.S. Department of Energy show that in Missouri, households below the federal poverty level are spending, on average, 22% of their income on energy bills.
Jacobson and Tajo’s report states “low- and moderate-income households and households of color are disproportionately feeling these rising energy bills.”
To reduce the immediate harm rising costs can cause customers, they recommend states expand eligibility in bill assistance programs and prohibit companies from shutting off a customer’s power during extreme heat or cold — which Missouri does.
Another solution state legislatures can consider, Jacobson said, is to support investments in renewable energy generation that costs less.
“Because so much of our electricity system runs on gas, the price of this fuel causes price spikes that make a meaningful difference in people's energy bills,” she said.
