Reduce Utility Rates

The Problem

American residential electricity rates have risen 25% in four years, from 15.04¢ per kilowatt-hour in 2022 to 18.83¢ as of mid-2026. [1] That is not a regional story. In California, residential rates have nearly doubled in a decade, from 17.39¢ to over 35¢—roughly twice the national average. [2] In Connecticut, rates sit at 32.24¢, the third highest in the nation; eight of the top ten states for rate increases are in the Northeast, where constrained gas pipelines and aging infrastructure drive costs onto homeowners who have no alternative supplier. [1] In Maine, residential rates jumped 22.9% in a single year—in a rural state where incomes are moderate, commutes are long, and there is no way to offset your electric bill by cutting your gas bill. [7] Over that same period, median real wages across the country have been essentially flat. Americans are not using dramatically more electricity; they are simply paying dramatically more for it.

A large industrial user in California pays an average of 21.53¢ per kilowatt-hour. [3] But that is the average. Negotiated volume discount contracts can drive industrial rates far lower—in some documented cases, to a fraction of the residential rate charged to the homeowner living next door. Some differential is legitimate: industrial users take power at high voltage, draw steady loads, and cost less per kilowatt-hour to serve. A ratio of two-to-one or three-to-one is defensible on engineering grounds. What is not defensible is a ratio of five-, eight-, or ten-to-one—because that gap contains costs that have nothing to do with delivering electricity to a house.

The causes differ by state, but the pattern is the same: costs are loaded onto residential ratepayers through proceedings they cannot meaningfully participate in. In California, wildfire liability, renewable portfolio compliance costs, subsidized rate programs, and decades of deferred grid maintenance land on homeowners [4] through rate-setting proceedings at the California Public Utilities Commission that are nominally public but practically impenetrable. The industrial user’s company sends attorneys and consultants to those proceedings. The homeowner does not. The costs land accordingly.

And then there is Texas. In February 2021, Winter Storm Uri exposed what happens when a state deliberately isolates its grid from federal interconnection to avoid federal regulation: it cannot import power when it needs it most. People died. Some households received electricity bills exceeding $10,000 in a single week. [8] Texas chose to forgo the resilience that interconnection provides, and its residents paid for that choice with their safety and their savings. That is the cost of an unaccountable grid, stated as plainly as it can be stated.

Meanwhile, insufficient interconnections between regional grids—not only in Texas but nationwide—mean that surplus capacity in one region cannot efficiently serve demand in another, suppressing the competition that would otherwise discipline prices. [5] And a new source of demand is arriving fast: data center construction pushed U.S. electricity consumption to record highs in 2025 and is projected to keep climbing, tightening supply in exactly the markets—Virginia, Texas, Ohio—that can least afford further strain. [6] The question is not whether those infrastructure costs will be paid, but by whom.

What I Propose

Open rate-setting proceedings to the people who pay the rates. State public utility commissions hold proceedings that determine what every household pays for electricity, gas, and water. In theory, these proceedings are public. In practice, they are dominated by utility company attorneys and industrial intervenors, while residential ratepayers—who bear the largest per-unit costs—have no meaningful voice. Every state should fund an independent residential ratepayer advocate with standing, staff, and subpoena authority to participate in rate cases on behalf of households. [4]

Require public justification of industrial-residential rate differentials. When a utility charges a residential customer five or ten times what it charges an industrial customer per kilowatt-hour, the utility should be required to publish a cost-of-service analysis demonstrating what portion of that differential reflects legitimate engineering economics and what portion reflects cost-shifting. Volume discount contracts negotiated behind closed doors should be disclosed to the ratepayer advocate and to state regulators.

Modernize grid interconnections to enable real competition. Surplus generating capacity in one region should be deliverable to another. Inadequate transmission interconnections between regional systems suppress the competition that would otherwise discipline monopoly pricing. Federal investment in transmission infrastructure—tied to measurable reductions in consumer costs—should be a priority. [5]

Ensure that new large-load users pay their own way. Data centers, cryptocurrency mining facilities, and other high-consumption operations are driving electricity demand to record levels. [6] The infrastructure costs of serving those loads should be borne by the users who create them, not shifted onto residential ratepayers through generalized rate increases.

How We’ll Know It’s Working