If your power bills are getting higher and higher, you’re not alone. That’s probably little comfort, but here’s some proof anyway: Utilities requested or were granted a total of $29 billion in rate increases in the first half of 2025, according to a study from advocacy group PowerLines. That’s more than double the total in the same period last year.
The biggest reason for these rising prices stems from the piece of the grid you can see from your window, as Heatmap reports. Utility poles and wires, also known as the distribution grid, shuttle power from high-voltage transmission infrastructure into homes and businesses. Over the last few years, building and maintaining these lines has become the biggest source of costs that utilities recoup via power bills, according to a December report from the Lawrence Berkeley National Lab.
Natural disasters are also driving up expenses as they force utilities to repair and harden their grid for future weather events. California utilities, for instance, have to rebuild after wildfires and in some cases are spending even more money to underground lines. In the Southeast, utilities routinely look to raise rates to cover post-hurricane restoration costs.
Then there’s the fact that natural gas remains the U.S.’s dominant energy source and that prices for that fuel remain higher than they were over much of the last two years.
Now for the second big question: Will things get better anytime soon? Probably not, for a few reasons.
For starters, power demand is on the rise, stemming in large part from the construction of energy-hungry data centers. Tech giants plan to keep building facilities to run their AI operations, and how they’re powered — and how that demand is managed — could end up making everyone else’s electricity more expensive.
That demand could be largely satiated by new solar and wind farms, which are typically quicker and cheaper to stand up than fossil-fueled and especially nuclear power plants. But the One Big Beautiful Bill Act that Republicans passed in July will soon wipe out federal tax credits that incentivized clean energy construction.
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Treasury rules tighten access to clean energy tax credits
The U.S. Treasury Department has released guidance that will make it harder to access wind and solar tax credits before their ultimate expiration, Canary Media’s Jeff St. John reports. The One Big Beautiful Bill Act gives wind and solar developers two options to tap the credits: They must either put their project in service by the end of 2027 or begin construction by July 2026. The Treasury’s new guidance narrows the federal government’s longstanding definition of what marks the start of construction.
