The average U.S. household is on track to pay more for electricity through the rest of the decade, according to updated federal forecasting released this month. Residential power prices climbed from 16.5 cents per kilowatt-hour in 2024 to an estimated 17.3 cents in 2025, and federal energy analysts now expect the increases to continue in 2026 and again in 2027. The driving force behind the climb is not primarily fuel costs or general inflation; it is a surge in electricity demand from data centers and expanding industrial activity that is reshaping how utilities plan generation and pricing for the rest of the decade.
EIA’s September Outlook Pencils In 18.6 Cents by 2027
The U.S. Energy Information Administration, the statistical and analytical arm of the Department of Energy, updated its residential electricity price forecast in its September 2026 Short-Term Energy Outlook, the monthly report the agency uses to track near-term trends across oil, natural gas and power markets. The new report puts the national average residential price at 18.2 cents per kilowatt-hour in 2026 and 18.6 cents in 2027, with both years explicitly labeled as projections in the agency’s own tables rather than settled figures, distinct from the actual 2024 and 2025 numbers that already show real increases before any forecasting is layered on top.
The agency’s complete price table, published on its electricity, coal and renewables forecast page, lists the residential rate climbing from 16.5 cents in 2024 to 17.3 cents in 2025, then to 18.2 cents in 2026 and 18.6 cents in 2027. That progression works out to roughly a 13% increase over three years, a pace that has outrun the general rate of consumer inflation over the same stretch. The agency finished the modeling behind these numbers on September 3, 2026, and published the report six days later.
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Data Centers Are Driving the Increase, Not Fuel Costs
Unlike past electricity price run-ups tied mainly to natural gas or coal costs, this forecast is built around a demand story. The agency’s September 9 press release announcing the outlook projects U.S. electricity generation will grow 2.2% in 2026 to a record 4,368 billion kilowatt-hours, with an additional 1.7% of growth expected in 2027, driven largely by data center construction and rising manufacturing activity in the commercial and industrial sectors. The release attributes 63% of the total growth in 2026 electricity sales to the commercial sector, the category that includes data centers, with industrial users accounting for roughly another fifth of that growth.
That demand is also reshaping the generation mix behind the price. Coal’s share of U.S. electricity generation is projected to fall from 17% in 2025 to 16% in 2026 and 14% in 2027, while solar rises from 7% to 9% and wind edges up from 11% to 12% over the same span. The West South Central region, which includes Texas, is expected to account for the largest regional share of electricity sales growth even after Texas regulators paused new data center grid connections to conduct a review of proposed projects. When large new commercial loads are added to a regional grid, utilities typically spread the cost of new generation and transmission across their entire customer base, including residential ratepayers who never signed up for a nearby server farm.
What the Percentage Increase Means for a Typical Power Bill
The cents-per-kilowatt-hour figures can understate how the change actually lands on a monthly bill. Moving from a 16.5-cent rate in 2024 to an 18.6-cent rate in 2027 is a 12.7% increase in the price of every kilowatt-hour consumed, before any change in how much electricity a household actually uses. Applied to a hypothetical $150 monthly electric bill at 2024 rates, that percentage works out to roughly $169 a month at the 2027 rate for the same amount of power, an illustration of the rate increase alone rather than an official household estimate.
The detailed monthly price table behind the forecast, found in the agency’s full September report, breaks the same trend down by customer class. Industrial customers are projected to pay 8.62 cents per kilowatt-hour in 2025, 9.00 cents in 2026 and 9.10 cents in 2027, while commercial customers are projected at 13.41, 13.99 and 14.15 cents over the same three years. Both climb more slowly, in percentage terms, than the residential rate, meaning households are absorbing a larger share of the price increase than the businesses whose demand is driving it.
A Forecast Built to Be Revised Every Month
The September figures are not final. EIA completed the modeling behind this outlook on September 3, 2026, and has scheduled its next release for October 6, 2026, at which point the 2026 and 2027 residential price projections could move up or down based on updated fuel costs, weather assumptions and electricity demand data. The report also notes that its price figures are not adjusted for inflation, meaning the dollar-and-cents comparisons reflect nominal prices rather than purchasing power.
Historically, EIA’s short-term residential price forecasts have tracked closely with the actual annual averages that later show up in the agency’s retail sales data, but the gap between a projection and the eventual final number tends to widen the further out the forecast reaches. That is why the 2026 figure, built on nine months of the year’s actual data, carries more certainty right now than the 2027 figure does.
The Property-Tax Paperwork Nobody Mails Automatically
Rising electricity rates are only one piece of the fixed-cost squeeze facing homeowners on a set income; property-tax bills climb on their own separate schedule, set by local assessors rather than a federal agency. Many counties offer freezes, exemptions or circuit-breaker credits that reduce that bill, but almost none of them notify homeowners automatically, so the relief exists only for people who know to apply, and often to reapply every year.
The Senior Property Tax & Home-Cost Relief Kit covers, across 11 pages, the five main kinds of property-tax relief, the circuit-breaker credit that includes renters, and help with heating, cooling and home-repair costs, alongside an application log and renewal calendar for tracking deadlines.
Compare the application log and renewal calendar in The Senior Property Tax & Home-Cost Relief Kit.
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