As state regulators deliberate the arcane details of electricity rate structures in 2026, they’ll be working under the unfamiliar glare of national politics.
Rising electricity prices are expected to be a hot topic in midterm congressional races, especially after Democrats used the issue to propel themselves to victories in off-year races in November. The deepening consumer anxiety and political backlash is thrusting attention on the state utility commissions where electricity rates are set.
During a White House meeting in November, even President Donald Trump and New York City Mayor-elect Zohran Mamdani found common ground on energy: They agreed that Consolidated Edison should cut its rates.
With electricity rate cases on the calendar in political battleground states like Michigan, Arizona and Ohio, there’s likely to be even more attention on the nitty-gritty ratemaking process in the new year.
“It’s been a long time coming, but now we’re the belle of the ball,” said David Springe, president of the National Association of State Utility Consumer Advocates. Springe’s group represents the state offices that weigh in on rate cases to press for cheaper rates and consumer protections.
According to data from the U.S. Energy Information Administration, the average residential utility rate rose nearly 5 percent between 2024 and 2025 and is forecast to rise another 4 percent between 2025 and 2026. Monthly data shows an even more stark 12.5 percent increase since Trump took office, although rates can vary based on the season.
Independent forecasts have projected that Trump policies could further drive up prices, especially by reducing the deployment of low-cost wind and solar power and promoting more expensive fossil fuel power. The growing demand from data centers is also threatening to push up prices as demand rises, as recent record-high prices in the PJM Interconnection electricity auction showed.
Energy Secretary Chris Wright said in an interview on Fox News last week that as the Trump administration’s policies take effect, “you will see declines in electricity prices later this term.” In a statement, the White House said that “blue states like California and Maine are stubbornly choosing Green Energy Scam projects that are making electricity bills unaffordable.”
“Fixing Joe Biden’s energy crisis has been a priority for President Trump since day one, and lowering energy costs for American families and businesses will continue to be a top priority in the new year,” said White House spokesperson Taylor Rogers.
The federal government, however, has limited authority over what consumers actually pay. Those decisions are determined by utilities and state regulators, owing to a range of factors like the generation mix, infrastructure needs, rate structure and extreme weather impacts.
A recent report by researchers at the Lawrence Berkeley National Laboratory found that a primary driver of price increases has been heavy spending on aging local distribution and transmission infrastructure — the wires that carry electricity from power plants to homes and businesses. Fuel price spikes linked to the Ukraine-Russia war also helped account for some increases, as did recovery from natural disasters and extreme weather.
Regardless of the cause, the higher cost of electricity has been absorbed into a much bigger national discussion about the cost of living, from housing and child care to health insurance and food.
“It’s so rare that the mass public would get engaged in a rate case,” said Sanya Carley, a professor at the University of Pennsylvania who studies electricity markets. “We don’t know what this will mean, especially as it’s happening simultaneously with trends like data centers, cybersecurity threats and resiliency that are totally changing the playing field for utilities.”
Affordability’s ‘inflection point’
Utilities requested or were approved for more than $34 billion in new rates in the first three quarters of 2025, according to research from the consumer advocacy nonprofit PowerLines. That’s up from $16 billion in the same period in 2024.
In Arizona, the investor-owned utilities Tucson Electric Power and Arizona Public Service are each seeking rate increases, both of which would increase customer rates by about 14 percent. The requests have attracted the attention of Attorney General Kris Mayes (D), who has intervened in the cases and argued that APS’ request is “naked corporate greed.”
Vania Guevara, political and advocacy director for the Chispa Arizona, a project of the League of Conservation Voters, said Mayes’ involvement is a “big deal.”
“She is for the people, and it’s a huge deal for the attorney general to say this is wrong,” said Guevara. “We’re getting more attention and awareness on these issues and people are starting to put the pieces together.”
APS has said the rate hike is necessary to meet growing demand, improve resiliency and upgrade its power plants to make sure they are producing when demand is highest. The company also says it will charge data centers and large loads more to account for their infrastructure needs.
The Arizona Corporation Commission — which has five elected Republican members and no Democrats — is set to consider both rate cases next year, and they could take effect by the second half of the year. The proceedings will play out during a gubernatorial election where Democratic Gov. Katie Hobbs is seeking a second term.
Similarly, regulators in Michigan will be considering rate cases that could affect more than 4 million consumers the same year voters will elect a new governor and U.S. senator. Consumers Energy, which serves the state’s Lower Peninsula, is seeking a roughly 11 percent increase. Detroit-based DTE is requesting a $574 million rate boost, which would increase the average monthly bill by $13.50. Both say the rates are necessary given growing demand and extreme weather.
Matthew Bandyk, an energy consultant who works with the Citizens Utility Board of Michigan, said the group recognizes the need for grid improvements, but is asking that the utility focus on more cost-effective strategies to improve reliability and to reduce the return on equity they receive.
Democrats won off-year races in gubernatorial elections in Virginia and New Jersey in part by messaging on utility affordability. Democrats also flipped two seats on the Georgia Public Service Commission for the first time in roughly a generation.
The rising consumer anger has drawn more politicians into the rate case fight. Maine Gov. Janet Mills (D) earlier this year pushed for state regulators to reject a requested rate increase from Central Maine Power, which was ultimately vetoed in November. Rep. Josh Riley (D-N.Y.) has intervened in rate cases this year, including a rate increase request by utility Central Hudson.
The request, he said in a September statement, “is wrong, it’s rigged and it’s why I filed this appeal.”
Utilities, however, say they’re not needlessly jacking up rates. They’re looking to pay for much needed infrastructure to keep the lights on amid the first sustained increase in electricity demand in years.
“America’s electric companies are focused on keeping electricity reliable and as affordable as possible for more than 250 million Americans,” Drew Maloney, president of the Edison Electric Institute, said in a statement. “In every state across our nation, we are making essential investments to lower costs and protect America’s most important machine — the U.S. electric grid.”
EEI, which represents investor-owned utilities, has worked to integrate data centers onto the grid without driving up costs. A recent study by consulting firm E3, for example, found that four Amazon data centers across different states had not raised rates for nearby homes and, in some cases, had generated revenue that could put downward pressure on rates.
Charles Hua, executive director of PowerLines, said that after 2025 marked an “inflection point” on electricity affordability, more politicians will have to pay attention to the regulatory world.
“This issue is salient in a way that nobody saw coming,” Hua said. “People are reading their utility bills and paying attention more than ever, and that’s because they have no choice.”
This story also appears in Climatewire.
