Electricity prices are rising faster than overall inflation, and a hotter-than-usual summer could push many households into sharply higher utility costs. That combination — more kilowatt-hours used to stay cool, at higher prices per kWh — is squeezing budgets nationwide.
“Climate scientists think this could be the hottest summer on record or at least close to it,” says Mark Wolfe, head of the National Energy Assistance Directors Association (NEADA). “So families need to use more of an increasingly expensive product to stay cool this summer. And that’s going to be tough.”
NEADA projects that electricity bills will be about 8.5% higher on average this summer than last year, with residents in some Southern states facing even larger increases.
People already feel the pinch. Robin Westphal, who lives between Houston and Galveston, Texas, says her well-insulated home still produced air-conditioning bills topping $300 a month last year. Faced with expected higher prices, she and her husband are trimming other spending — groceries, dining out and extra activities — to afford cooling.
In northwest Arkansas, seminary student Matthew Kolb says he donates plasma twice a week to help cover expenses. His household pays roughly $250 a month for electricity; with two children under 2 and family members sensitive to heat, higher summer utilities complicate an already tight budget despite full-time work and reserve military service.
Nationwide, the cost of a kilowatt-hour has risen more than 6% in the last year and about 39% over the past five years. Many regions will also need to buy more electricity this summer because El Niño and other factors are expected to drive prolonged heat, keeping fans and air conditioners running longer.
Federal support for low-income households, through the Low Income Home Energy Assistance Program (LIHEAP), has not increased in three years even as utility prices climb. That leaves struggling families with fewer resources to absorb rising bills.
Several factors are pushing electricity costs up: higher natural gas prices, investments to rebuild and harden the power grid, and growing demand from energy-intensive facilities such as data centers. “The combination of [higher-priced] natural gas, rebuilding the grid, data centers are all pushing up the price of electricity,” Wolfe says.
Nonprofit energy assistance groups report more calls from middle-income households that are now having trouble paying power bills. Delia Anderson, who leads the Economic Opportunity Agency serving 10 Arkansas counties, notes that rising electricity expenses compound other increases — gas, groceries and general cost-of-living pressures — creating tighter household budgets and greater demand for aid.
Each year about 13 million U.S. customers fall so far behind on bills that their power is temporarily shut off. Some states restrict shut-offs on the hottest days to reduce health risks, but most states have no such protections.
In Texas, utilities are spending on grid upgrades to better handle extreme weather and surging demand, but those investments can raise rates. Residents also remain concerned about rolling outages when heat spikes. Westphal said her family bought a generator to cope with potential daytime outages, an expense they had to absorb to stay safe during blackouts.
For many households, relief won’t come until cooler weather returns. Westphal says she expects some easing around mid-October, but until then families will be juggling higher bills, stretched budgets and tough choices about where to cut back.
