The Long Term: Steadily Rising Electricity Costs In The US

To understand the overall price trends of electricity, the average residential prices across major U.S. cities provides the best proxy.

This is because residential prices are impacted by fewer variables than the commercial, industrial or transportation sectors.

Unlike the commercial, industrial and transportation sectors where pricing is ultimately determined by a combination of factors, including each building's unique usage profile, the transmission nodes that electricity passes through, and the tariff class for the property, residential pricing is much more simple.

Rising Demand Outpaces Aging Infrastructure: Resulting In Higher Prices

Over time electricity prices have steadily risen, with accelerated increases this decade driven by inflation, growing demands, and the buildout of AI data centers. This follows the prior decade that had more moderate increases, supported by efficiency gains and increases in natural gas supply.

Just as it was very difficult to predict all of the challenges that the grid would experience this decade (i.e. rise of massive AI Datacenters), the same holds true over the upcoming years and decades.

The greatest certainty, is that these restraints will continue to lead to rising prices, and that the price direction for the commercial, industrial and transportation sectors will move in a similar direction as the residential sector.