Electricity prices in the United States rose 6.9% in 2025, outpacing overall inflation which registered at 2.9%, according to a February 12, 2026, report from Goldman Sachs. The increase is largely attributed to surging demand from artificial intelligence data centers, which are now projected to account for 40% of electricity demand growth through the end of the decade.
The rising cost of electricity is expected to have broader economic consequences, potentially lowering disposable income, curbing consumer spending, and modestly slowing economic growth, Goldman Sachs analysts warned. Households are anticipated to see an additional 6% increase in electricity prices through 2027, followed by a slowdown to 3% in 2028 as natural gas prices are expected to decline. The bank estimates that consumer spending growth will fall by 0.2% and overall economic growth will slow by 0.1% as a result of these price increases.
The situation is not uniform across the country. A December 15, 2025, report from the World Resources Institute highlighted that electricity price changes vary significantly based on regional market structures and regulatory decisions. The impact will likely be more pronounced for lower-income households, as electricity represents a larger portion of their overall spending. Regions hosting a greater concentration of data centers will also experience a more substantial impact, according to Manuel Abecasis, a Goldman Sachs analyst.
The U.S. Energy Information Administration (EIA) reported in May 2025 that retail electricity prices have been increasing faster than the rate of inflation since 2022, and this trend is expected to continue through 2026. While nominal prices for fuels like gasoline and heating oil have declined since 2022, electricity prices have continued to climb steadily. The EIA forecasts that regions with already high electricity prices – including the Pacific, Middle Atlantic, and New England census divisions – may see even larger increases than the national average.
Several factors contribute to the rising costs beyond data center demand. According to a study by Lawrence Berkeley National Laboratory and the Brattle Group, infrastructure impacts from extreme weather events like wildfires and hurricanes, necessary grid upgrades for modernization and resilience, and the volatility of fossil fuel costs are all playing a role. Since 2010, the average price of electricity across the U.S. Has risen by almost 30%, with utilities requesting a total of $71.2 billion in rate increases through 2028, as of December 2025.
The increase in electricity prices is also expected to contribute to core inflation, rising by 0.1% through 2027, according to Goldman Sachs. Energy prices have risen roughly twice as fast as overall inflation since the COVID-19 pandemic, and the increase is not solely attributable to volatile fuel costs, according to NPR reporting from October 6, 2025.
The Electric Power Research Institute’s Energy Wallet estimates that average electricity prices have grown by approximately 30% over the past 10 years.
