Rising Electricity Prices: Energy Strategy and Policy Expert Emily Sanford Fisher on the Future of Affordability

Between 2010 and 2020, U.S. residential electricity prices increased at a relatively steady pace of about 1–2% per year on average, according to U.S. Energy Information Administration data. A household paying about $115 per month in 2015 might have expected that bill to rise to roughly $125–$130 by 2020 if trends held steady. In recent years, however, electricity prices have climbed at a faster pace, an acceleration that energy sector strategist and policy expert Emily Sanford Fisher has described as the result of layered structural pressures rather than a single market shock.

Electricity prices rarely move for a single reason. While headlines may point to one culprit, like fuel spikes, inflation, or clean energy mandates, the reality is more complex. “The drivers of recent increases in electricity prices are actually quite varied,” says Emily Sanford Fisher, an electricity policy expert and strategist. “These include increasingly and more volatile natural gas prices, supply chain constraints, inflation, new demand growth from AI, and needed investments in grid modernization.”

Global events such as geopolitical conflict, export demand for liquefied natural gas, and extreme weather disrupting production can influence what shows up on a monthly utility statement. Because fuel costs are directly passed onto customers via electricity rates, where natural gas dominates the generation mix, electricity prices tend to be more sensitive to those swings.

During Winter Storm Uri in February 2021, freezing temperatures in Texas disrupted gas production and delivery, sending spot prices from roughly $2.70–$3.00 per MMBtu (one million British thermal units) to $200–$400 per MMBtu in many trades, and as high as $1,000 in some hubs. Similar gas price spikes occurred during more recent extreme weather events, like Winter Storm Fern early this year, driving up wholesale electricity spot prices and setting up retail customers for bigger bills.

Even outside of crisis events, higher gas prices flow through to customers. In parts of the Midwest and Southeast, where natural gas generates 30-50% or more of electricity, sustained price increases in 2022 led utilities to seek rate adjustments in 2023 to recover higher fuel costs. Because fuel is typically treated as a pass-through cost in regulated markets, utilities don’t earn a profit on it, but customers still pay for it. “As natural gas has become a bigger part of the electricity generation fuel mix – growing from less than 20 percent nationally in the early 2000s to 40 percent in 2025 – customers are increasingly subject to price increases and volatility," said Fisher.

Utilities are also undertaking large-scale infrastructure upgrades. Much of the grid was built decades ago. Modernization includes replacing or upgrading aging transmission and distribution lines, hardening systems against wildfires and severe weather, and deploying smart meters and grid-monitoring technology. When utilities undertake these critical modernization projects, those expenses are typically recovered through rate adjustments approved by public utility commissions, meaning customers ultimately fund the investment.

However, these upgrades are essential, as the consequences of outdated systems can far exceed the cost of preventative upgrades. For example, in 2018, PG&E equipment was involved in the ignition of the Camp Fire in California, the deadliest wildfire in the state’s history. The fire destroyed nearly 19,000 structures, caused 85 fatalities, and ultimately contributed to more than $30 billion in wildfire-related liabilities and the company’s 2019 bankruptcy. Investigations found that aging transmission equipment, including a nearly 100-year-old hook and suspension assembly, failed during high winds.

The company, like other utilities in California, is now in the middle of a multi-year, state-approved effort to upgrade its transmission and distribution system to deploy the latest technologies that mitigate the risk its equipment could be involved in future wildfires. “Grid modernization costs, like wildfire mitigation investments, are reflected in customer rates,” Fisher agreed, “but these are aimed at preserving the life and health of the community and ensuring everyone has access to reliable electricity as the wildfire risk in many states has increased due to changing climate patterns. These are necessary investments, even if they increase costs.”

Some critics point to investments in renewables as a potential cause of increased electricity prices. Utilities are investing in wind, solar, battery storage, and the gradual retirement of older coal plants as part of a long-term shift toward a cleaner, more modern grid. These upgrades require upfront capital, but they’re designed to strengthen reliability, reduce emissions, and position the energy system for the future. In regulated markets, these costs are typically recovered over time via electricity rates.

But, renewables also bring a key advantage: no fuel costs. Emily Sanford Fisher points out that the potential upfront expense of expanding transmission and clean energy infrastructure should be considered alongside the long-term savings from reduced reliance on fossil fuels. “Historically, clean energy investments actually have helped put downward pressure on electricity rates,” she noted.

As electricity systems evolve, the central challenge will be balancing three priorities: reliability, sustainability, and affordability. Demand for electricity is growing and is expected to continue to grow in the coming years, driven by electric vehicles, heat pumps, data centers, and broader electrification of homes and businesses. Meeting that demand will require expanded generation capacity, upgraded transmission networks, and smarter grid management, all of which carry costs. Technological innovation offers some optimism as the cost of wind, solar, and battery storage has declined over the past decade.

A proactive approach is needed to manage cost pressures in light of increasing demand for electricity. Utilities will need to work with their regulators to make prudent investments in new generation, take steps to reduce other costs that can impact rates, and work with customers who are having trouble paying their bills, especially low-income customers. In the long term, investments in clean energy that diversify the generation portfolio and new transmission infrastructure will help keep electricity rates low and the system reliable.

“But, this is not the job of regulators and utilities alone. Policymakers can play a role, too,” said Fisher, “by making it easier – and less time-consuming and expensive – to build new energy infrastructure. They can also continue to investigate how to better align electricity and gas markets so that customers are not feeling the pinch when extreme weather drives up gas prices.”

The long-term cost of electricity will depend on a range of factors. Supportive policy direction that provides enough clarity to support sustained investment in new infrastructure development and deployment is essential. As Emily Sanford Fisher emphasizes, navigating fuel volatility, infrastructure investment, and regulatory signals will be critical as the power system continues to evolve.

Emily Sanford Fisher leads Enodia Energy, a consulting firm focused on advancing an affordable, reliable, and clean energy future. With experience spanning utility strategy, clean energy policy, and electricity regulation, she has held senior leadership roles at the Smart Electric Power Alliance and the Edison Electric Institute. She holds degrees from The George Washington University and Georgetown University Law Center, is admitted to practice law in Maryland and Washington, D.C., and teaches on energy law and grid regulation.