The federal government’s main energy forecaster expects the average U.S. household’s electricity rate to keep climbing over the next two years, even as the pace of the increase slows from where it has been. The Energy Information Administration’s September Short-Term Energy Outlook puts the residential price at 18.6 cents per kilowatt-hour in 2027, up from 16.5 cents in 2024 — a rise of nearly 13% in three years. The agency’s own breakdown points to commercial buildings and factories, not household habits, as the main reason the line keeps moving up.
The EIA’s Four-Year Price Path
The Short-Term Energy Outlook released September 9, 2026 lays out a specific path for the average residential electricity price: 16.5 cents per kilowatt-hour in 2024, 17.3 cents in 2025, and then projected increases to 18.2 cents in 2026 and 18.6 cents in 2027. The last two figures are forecasts, not final numbers — the agency completed this round of modeling on September 3, 2026, and plans its next update for October 6, 2026, as new data on fuel costs, weather and demand comes in. Even with that caveat, the direction has held steady across recent editions of the report: up, and by a similar amount each year.
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Commercial and Industrial Buildings Are Driving Most of the Increase
Total U.S. electricity sales are forecast to reach 4,135 billion kilowatt-hours in 2026, an increase of almost 2% over 2025, and to climb again to 4,211 billion kilowatt-hours in 2027. Commercial-sector sales — offices, stores, warehouses and the data centers that increasingly sit alongside them — account for 63% of that 2026 increase and 56% of the 2027 increase, with industrial users adding another 22% and 36%. In growth-rate terms, the EIA puts commercial sales up 3.3% in 2026 and 2.7% in 2027, versus a smaller 1.6% and 2.6% rise for industrial sales in those same two years. Residential demand is a much smaller share of the growth, which helps explain why the price line tracks the cost of building and running the broader grid rather than how much any one household runs its air conditioner.
The West South Central Region Is Absorbing Most of the New Demand
Where that new demand shows up matters. The West South Central region — Texas, Oklahoma, Arkansas and Louisiana — accounts for nearly 20% of the nationwide growth in electricity sales in 2026 and nearly 40% of it in 2027, largely because of data center development and expanding manufacturing. That is happening even though Texas has paused the connection of new data centers to its grid to allow a regulatory audit of proposed projects. A pause in new hookups slows the pace of growth without reversing it — the region still carries the largest regional share of the country’s added electricity use in the EIA’s forecast. The agency’s own numbers show that pause already showing up: last month’s Short-Term Energy Outlook had the region’s electricity sales reaching 765 billion kilowatt-hours in 2026 and 829 billion in 2027, and this month’s report trims both figures to 761 billion (down 0.5%) and 790 billion (down 4.7%) — the EIA’s own comparison of “current forecast” against “previous forecast,” published in the same September release.
Generation Growth Concentrates in a Few Grids
The added demand is not spreading evenly across the country’s power grids, either. The EIA expects the PJM Interconnection — the regional grid covering much of the Mid-Atlantic and parts of the Midwest — to account for nearly 45% of the growth in total U.S. generation in the forecast, with natural gas driving the increase in 2026 and natural gas, coal and wind together driving it in 2027. Solar additions are concentrated elsewhere: the agency expects 18 billion kilowatt-hours of new solar generation in the Texas grid known as ERCOT in 2026 and another 13 billion in the Midwest’s MISO grid, followed by 20 billion more in ERCOT and 11 billion more in MISO in 2027. That uneven build-out is part of why a national average price can move differently than what any one region experiences.
Coal Keeps Losing Ground While Solar and Wind Expand
On the supply side, the mix generating that electricity is shifting even as total generation grows. The EIA’s companion press release forecasts U.S. electricity generation reaching a record 4,368 billion kilowatt-hours in 2026, a 2.2% increase, with another 1.7% of growth in 2027. Coal generation is expected to fall 8% in 2026 and another 6% in 2027, while natural gas generation rises 2% and 1% in those same years. Solar generation is forecast to grow 21% in 2026 and 18% in 2027, and wind by 7% and 5%, as new capacity keeps coming online. The agency’s coal-production numbers tell the same story from the mining side: total U.S. coal output is forecast to fall from 528 million short tons in 2025 to 516 million in 2026 and 497 million in 2027, led by the Western region, which supplies roughly half the country’s coal and is expected to shrink about 4% in 2026 and another 5% in 2027, to 260 million short tons. Appalachian production holds roughly flat in 2026 before slipping about 2% in 2027, and Interior-region output stays close to last year’s level in 2026 before dropping about 5% in 2027, to 79 million short tons. Coal exports are still expected to rise even as domestic demand from power plants declines, a split between what the U.S. mines for its own grid and what it ships overseas. None of those shifts happen for free, and the residential price line in the same report reflects a grid being built out for more demand at the same time its fuel mix changes.
The EIA is careful to label its 2026 and 2027 figures as projections rather than settled facts, and the agency’s own track record shows those numbers shift somewhat from month to month as fuel costs, weather and construction schedules change. What has held steady across recent editions of the Short-Term Energy Outlook is the direction: residential electricity prices higher in 2027 than in 2026, and higher in 2026 than in 2025. Households budgeting for the next two years have a specific, sourced number to work from — 18.6 cents per kilowatt-hour, according to the agency’s own September data.
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This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
