US power prices are rising quickly, and residential buyers are feeling the most pain
Understanding the gap between residential buyers and their commercial and industrial counterparts
Across the board, US electricity prices have experienced 6% inflation over the past year, which is roughly three times the Fed’s economy-wide target.
But the burden has not been distributed evenly.
Residential electricity buyers are seeing record inflation-adjusted prices, while commercial and industrial buyers are paying below their historical peaks.
What’s going on?
Just how heavy is the load for residential buyers? And how has this relative load changed between these sectors over the 21st century?
The answer is not in power generation costs, which captures an outsized share of attention in this sector.
Instead, the answer has to do with which customers bear the cost of getting electricity from the power plant to the meter. That distinction is widening, and it has real implications for where residential rates go from here.
Let’s dive in.
US electricity prices have started climbing aggressively since the start of 2025
There is a reason we see so many headlines about increasing cost of living and concerns around affordability in the US. Electricity prices are among the most visible elements of this story.
The chart below shows what electricity prices have done across the US residential, commercial, and industrial sectors here in the US since the beginning of 2022.
