The article reports that states where electricity demand has actually fallen have seen the largest increases in electricity prices over the past five years. According to data, the seven states with the largest price increases are all those where demand fell, including Maine, New York, and California. Electricity prices rose 4.2% over the last year, outpacing broader inflation, with lower-income Americans particularly affected as they spend a median of nearly 10% of their income on energy. The article suggests that falling demand, rather than rising demand, is the main driver of rising electricity prices in these states.
Written by the local model on 2026-09-06,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
The states that saw the largest increase in electricity prices over the past five years were not states booming with new demand from industrial customers, such as Texas, but states where demand fell.
asserted
demand → see → Texas
Electricity prices rose 4.2% over the last year, outpacing broader inflation.
asserted
prices → rise → inflation
The popular explanation for the rise in residential electricity prices is the growth of data centers, but state-level data say otherwise.
asserted
data → say → centers
Lower-income Americans have the most to lose from ineffective energy policy.
asserted
Americans → have → policy
Households in the bottom 20% of income earners spend a median of nearly 10% of their income on energy, compared with 1.2% for the top 20% of income earners.
asserted
Households → spend → earners
According to the Census Bureau’s Household Pulse Survey, as of September 2024, 44% of adults with household incomes under $25,000 had been unable to pay an energy bill within the past year.
uncertain
% → accord → year
In that same income band, 56%, more than 15 million adults, reported that they forwent basic household necessities to pay an energy bill.
asserted
they → report → bill
Recommended Stories
Since January 2020, electricity prices have risen 43%, outpacing broader inflation at 28%.
asserted
prices → rise → %
Electricity demand forecasts have accelerated since 2022, ending a decade and a half of flat growth.
asserted
forecasts → accelerate → growth
This demand is driven by data centers, reindustrialization, and electrification.
asserted
demand → drive → centers
Utilities’ forecasts suggest that the United States will need to add capacity at nearly twice the pace that it did over the last decade to meet demand and maintain reserve margins.
asserted
it → suggest → margins
From 2019 to 2025, Texas’s electricity demand grew 21%, and real residential electricity prices increased by 4.5%.
asserted
prices → grow → %
Over the same time period, Virginia’s demand grew 22%, and its real residential electricity prices rose by 0.5%.
asserted
prices → grow → %
While both states saw their prices rise in real terms, both were below the 5.6% increase in the U.S. average real residential price.
asserted
both → see → price
The seven largest increases in electricity prices are all in states (and the District of Columbia) where demand fell.
asserted
demand → fall → Columbia
From 2019 to 2025, electricity demand in Maine fell by 5.9%, and real residential electricity prices rose by 23.3%.
asserted
prices → fall → %
Similarly, New York saw its demand fall by 1.4%, and real electricity prices rose 16.8%.
asserted
prices → see → %
There are more extreme examples, such as California, which had the largest price increase in the nation and saw its demand fall by 5%, but in this case, wildfires have played a role in both reducing demand and imposing other costs onto ratepayers.
asserted
wildfires → be → ratepayers
States need to worry more about falling demand than rising demand.
asserted
States → need → demand
Rising electricity prices are partially driven by utilities’ investments to expand and maintain existing infrastructure.
asserted
prices → rise → infrastructure
Investor-owned utilities invested $1.3 trillion (nominal) in total capital expenditures from 2015 to 2024.
asserted
utilities → own → 2024
Now the bill is coming due.
asserted
bill → come → ?
A utility’s rate base doesn’t shrink if customers use less electricity.
asserted
customers → shrink → electricity
The fixed costs of infrastructure investment will simply be spread over fewer kilowatt-hours of consumption.
asserted
costs → fix → consumption
When demand falls, these costs fall harder on the families and businesses that stick around.
asserted
that → fall → families
Data centers can raise household bills if states and grid planners get the policy wrong.
asserted
policy → raise → bills
PJM, the grid operator for 13 states, pays power generators in advance to ensure their customers will have power when they need it most.
asserted
they → pay → it
In its analysis of PJM’s capacity auction in December 2025, the Independent Market Monitor found that $6.2 billion of the $16.4 billion total, 38%, was attributable to new data center demand.
asserted
billion → find → demand
The costs of large industrial customers are being socialized onto ratepayers to ensure PJM will have enough power.
asserted
PJM → socialize → power
States should not turn away demand but instead require large industrial customers to bring their own supply or pay for any necessary new capacity.
asserted
States → turn → capacity
Grant Dever is a visiting fellow at the Foundation for Research on Equal Opportunity.
asserted
Dever → visit → Opportunity
