Released November 24, 2025 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)
"Electric bills" increasingly are being added to "gas and groceries" as a new way to summarize the challenges facing consumers. U.S. electricity companies have been on an investment surge in recent years, and those outlays are in various stages of being recovered from consumers via electricity prices. For more on that, see July 21, 2025, article - Utilities Seek Up to $29 Billion in Price Increases to Recover Outlays.
Forty-six states and the District of Columbia saw increases in electricity costs over the last 12 months, reported the U.S. Energy Information Administration (EIA). On a national average, electricity prices rose 5.8% from August 2024 to August 2025, according to the EIA's most recent "Electric Power Monthly" report, released October 24. But that national average masked sharply higher 12-month price runups in some states, such as the District of Columbia (up 26.5%), Maine (up 23.2%) and New Jersey (19%), the EIA said.
State regulators and elected officials have grown concerned about rising electric prices and are using a variety of tools to try to limit them. In the New Jersey gubernatorial race this month, winning candidate Mikie Sherrill supporting imposing caps on electricity. In Georgia, two Democrats were elected to the state's Public Service Commission after their Republican predecessors had approved six electric price hikes in two years. Virginia, California, Ohio, Maryland, Illinois and other states are exploring a variety of ways to limit electric price increases.
For the last 10 years, two Federal Reserve Banks--headquartered in Kansas City, Missouri, and Dallas, Texas--have collaborated on an annual one-day conference on "Energy and the Economy." For more on last year's conference, see December 2, 2024, article - New-build Gas Generation Can Head Off Projected Electric Generation Shortfall and November 22, 2024, article - Conference: Permitting, Siting Reforms Needed to Meet Future Energy Needs. A significant portion of the U.S. energy activity, including oil, gas, liquefied natural gas (LNG) and electric power, takes place in the 10 states that comprise those two banks' jurisdictions.
"Planned spending on generation and transmission are driving the growth in capex, but all areas are growing," she said.
Johnson said the IOUs with the largest planned capital spend over this five-year period include:
Click on the image at right to see a graphic of the capex plans for 32 large investor-owned utilities over the 2025-2029 period.
During an interview at the conference, she acknowledged this $1 trillion+ sum was only part of the picture, albeit a large part. Her dataset did not include planned capex spending by public power utilities, electric cooperatives or smaller IOUs.
In fact, Industrial Info is tracking approximately $1.28 trillion in planned capital spending over the 2025-2029 period by all participants in the electricity business. This planned capex will be spread among about 5,184 projects. The states with the largest planned power-related capex include Texas, Nevada, Arizona and California. The 10 states with the largest dollar value of planned electric capex expect to invest about $779 billion in their systems, across 2,731 projects, over the next five years.
Click on the image at right to see the 10 U.S. states with the largest dollar value of planned capex for the electric power industry over the 2025-2029 period.
"Electric demand growth is accelerating after a decade-plus of stagnation," Enverus' Johnson told conference attendees. "There is a lot of investment coming, and changes in supply and demand are stressing the grid."
Long delays in getting connected to the electric grid are compounding the challenge facing companies in the electricity business, she observed: "It takes three years to get a gas turbine, but it takes six years to get connected to the grid."
She left no doubt that utilities would seek to recover their outlays, and earn a profit on them, from customers of all classes: residential, commercial and industrial. But she said it was an open question which customer classes would bear what portion of those price increases, noting that most utilities don't have a good tariff that reflects the unique electric needs of data centers.
"Affordability and equity concerns are increasing and tariff rates are evolving," she said regarding large-load customers.
She estimated that President Donald Trump's tax and spend bill, enacted over the summer, would drive up power prices by about 20%, largely because it shortened the period under which renewable generation can claim tax credits. "For the estimated 1,180 gigawatts of queued solar photovoltaic and onshore wind projects we track, the elimination of the investment tax credit (ITC) and production tax credit (PTC) represents a significant blow to project economics," she told attendees.
"The devil's in the details," she said in conclusion. "Who's going to pay for all this energy infrastructure that companies plan to build?"
Key Takeaways
About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Summary
U.S. electric companies have announced plans to invest over $1 trillion in their businesses between 2025 and 2029, which will drive up electricity prices and could become a driver of inflation.New Inflation Shorthand: Gas, Groceries and Utility Bills
When discussing inflation and the state of the U.S. economy, news reporters, analysts and some politicians often use a simple term, "gas and groceries," as a proxy for the health of the nation's $30 trillion economy."Electric bills" increasingly are being added to "gas and groceries" as a new way to summarize the challenges facing consumers. U.S. electricity companies have been on an investment surge in recent years, and those outlays are in various stages of being recovered from consumers via electricity prices. For more on that, see July 21, 2025, article - Utilities Seek Up to $29 Billion in Price Increases to Recover Outlays.
Forty-six states and the District of Columbia saw increases in electricity costs over the last 12 months, reported the U.S. Energy Information Administration (EIA). On a national average, electricity prices rose 5.8% from August 2024 to August 2025, according to the EIA's most recent "Electric Power Monthly" report, released October 24. But that national average masked sharply higher 12-month price runups in some states, such as the District of Columbia (up 26.5%), Maine (up 23.2%) and New Jersey (19%), the EIA said.
State regulators and elected officials have grown concerned about rising electric prices and are using a variety of tools to try to limit them. In the New Jersey gubernatorial race this month, winning candidate Mikie Sherrill supporting imposing caps on electricity. In Georgia, two Democrats were elected to the state's Public Service Commission after their Republican predecessors had approved six electric price hikes in two years. Virginia, California, Ohio, Maryland, Illinois and other states are exploring a variety of ways to limit electric price increases.
The Federal Reserve, Energy and Electricity
A 5.8% national annual gain in electricity prices is well above the 2% inflation rate targeted by the Federal Reserve. The nation's central bank has two priorities: containing inflation and achieving maximum employment. It uses interest rates to indirectly influence consumer spending and thus inflation. Low inflation is thought to be a condition that leads to fuller employment, as it enables businesses to cost-effectively expand and add new workers. But the demand for labor in the U.S. is softening, possibly a result of businesses' growing use of technology to automate some tasks traditionally performed by workers. Fulfilling its second mandate, maximum employment, is proving to be a particularly difficult nut for the central bank to crack.For the last 10 years, two Federal Reserve Banks--headquartered in Kansas City, Missouri, and Dallas, Texas--have collaborated on an annual one-day conference on "Energy and the Economy." For more on last year's conference, see December 2, 2024, article - New-build Gas Generation Can Head Off Projected Electric Generation Shortfall and November 22, 2024, article - Conference: Permitting, Siting Reforms Needed to Meet Future Energy Needs. A significant portion of the U.S. energy activity, including oil, gas, liquefied natural gas (LNG) and electric power, takes place in the 10 states that comprise those two banks' jurisdictions.
Utilities Plan Over $1 Trillion in Capex Over 2025-2029 Period
Thirty-two large U.S. investor-owned utilities (IOUs) plan to make capital expenditures (capex) collectively exceeding $1 trillion for the 2025-2029 period, Bernadette Johnson, general manager for power and the energy transition at Enverus (Austin, Texas), told about 150 attendees at the Fed's "Energy and the Economy" conference, held November 14."Planned spending on generation and transmission are driving the growth in capex, but all areas are growing," she said.
Johnson said the IOUs with the largest planned capital spend over this five-year period include:
- Duke Energy (Charlotte, North Carolina), at about $8.5 billion
- Southern Company (Atlanta, Georgia), at approximately $7.75 billion
- NextEra Energy Incorporated (Juno Beach, Florida), at about $7.5 billion, and
- Pacific Gas and Electric (Oakland, California), at over $6 billion
During an interview at the conference, she acknowledged this $1 trillion+ sum was only part of the picture, albeit a large part. Her dataset did not include planned capex spending by public power utilities, electric cooperatives or smaller IOUs.
In fact, Industrial Info is tracking approximately $1.28 trillion in planned capital spending over the 2025-2029 period by all participants in the electricity business. This planned capex will be spread among about 5,184 projects. The states with the largest planned power-related capex include Texas, Nevada, Arizona and California. The 10 states with the largest dollar value of planned electric capex expect to invest about $779 billion in their systems, across 2,731 projects, over the next five years.
"Electric demand growth is accelerating after a decade-plus of stagnation," Enverus' Johnson told conference attendees. "There is a lot of investment coming, and changes in supply and demand are stressing the grid."
Long delays in getting connected to the electric grid are compounding the challenge facing companies in the electricity business, she observed: "It takes three years to get a gas turbine, but it takes six years to get connected to the grid."
She left no doubt that utilities would seek to recover their outlays, and earn a profit on them, from customers of all classes: residential, commercial and industrial. But she said it was an open question which customer classes would bear what portion of those price increases, noting that most utilities don't have a good tariff that reflects the unique electric needs of data centers.
"Affordability and equity concerns are increasing and tariff rates are evolving," she said regarding large-load customers.
She estimated that President Donald Trump's tax and spend bill, enacted over the summer, would drive up power prices by about 20%, largely because it shortened the period under which renewable generation can claim tax credits. "For the estimated 1,180 gigawatts of queued solar photovoltaic and onshore wind projects we track, the elimination of the investment tax credit (ITC) and production tax credit (PTC) represents a significant blow to project economics," she told attendees.
"The devil's in the details," she said in conclusion. "Who's going to pay for all this energy infrastructure that companies plan to build?"
Key Takeaways
- Utility costs have been added to gas and groceries as an informal shorthand way to describe how rising prices are affecting U.S. consumers.
- Utility prices have jumped an average of 5.8% across the nation over the August 2024-August 2025 period, though some states saw increases that were three or four times higher than that.
- U.S. electricity providers plan to invest over $1 trillion in their businesses over the 2025-2029 period.
- States are exploring a variety of ways to limit the impact of higher electric prices and bills.
- Higher electric prices and bills likely will contribute to an increase in inflation.
About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
