States Where Electricity Will Rise The Most In 2026

U.S. residential electricity prices are expected to rise nationally by about 4% to 5% in 2026, reaching an average of approximately 18¢/kWh (the amount of electricity a 1,000-watt appliance uses in an hour). This increase is driven by grid upgrades, rising natural gas fuel costs, data center demand, and infrastructure investments. The rate of increase varies by region, with above-average hikes occurring primarily in high-cost or high-demand areas.

For some states, a 4% to 5% increase would be a relief. According to the National Energy Assistance Directors Association, electricity prices in Missouri rose 37% in the first half of 2025, while North Dakota saw a 30% increase. According to NerdWallet, another 19 states experienced increases between 10% and 20%. This is happening during a period of surging demand. USAToday reported that on July 28 from 7 to 8 p.m. ET, Americans consumed 758,149 megawatt-hours of electricity—a new national record, according to the EIA. The primary reason was high temperatures across much of the nation, which caused a spike in air conditioner use.

The rate of growth isn’t the only issue. Some states have much higher residential electricity costs than others. Hawaii’s price is 40¢/kWh, by far the highest in the country. The EIA reports that although many homes in Hawaii have solar photovoltaic systems that reduce the need for grid-delivered electricity, most grid-delivered electricity generated in Hawaii comes from petroleum-fired generators. Electricity prices in Hawaii are high because petroleum-fired electricity generation is expensive compared with other energy sources.

Residents in some states are more fortunate. Nevada has the lowest price at 11¢/kWh. Several nearby states also have low rates, with Idaho at 12¢/kWh. Louisiana, Utah, Oklahoma, Nebraska, and North Dakota all range between 13¢/kWh and 14¢/kWh.

As prices have risen, there has been a shift in electricity sources. According to EMBER, in 2024, wind and solar reached a record 17% (757 TWh) of U.S. electricity, overtaking coal for the first time. Coal dropped to a historic low of 15% (653 TWh). Just six years ago in 2018, coal was three times larger than the combined total of wind and solar. However, this change may not continue. The Trump Administration has made it easier to drill for oil and mine for coal while making it more difficult to build offshore wind farms and certain types of solar installations.

The primary reasons for higher energy prices hinge on demand, at least in the short term. Air conditioning use driven by hot weather, crypto-mining, and the growth of AI data centers are all happening simultaneously. According to Pew Research, U.S. data centers consumed 183 terawatt-hours (TWh) of electricity in 2024, according to IEA estimates. That works out to more than 4% of the country’s total electricity consumption last year and is roughly equivalent to the annual electricity demand of the entire nation of Pakistan. By 2030, this figure is projected to grow by 133% to 426 TWh.

No exact forecast exists publicly from the EIA, but consensus from the EIA Short-Term Energy Outlook issued earlier this month and other analyses points to these regions and states facing the steepest pressure:

Pacific Region (California, Oregon, Washington)

• Projected increase drivers: High baseline rates, wildfire effects, renewable integration, new fixed charges based on income in California, and aging grid
• Expected impact: Above-national-average increases; rates already among the highest at 25-40¢/kWh

New England (Massachusetts, Connecticut, Rhode Island, Maine)

• Projected increase drivers: Natural gas dependence, offshore wind delays, grid upgrades; Trump Administration plans will keep wind projects offline
• Expected impact: Significant hikes; rates often 25-30¢/kWh or higher

Middle Atlantic (New York, New Jersey, Pennsylvania)

• Projected increase drivers: PJM capacity auction spikes, data center growth, transmission investments; New Jersey had a 21% rise in 2024-2025, a pace that could continue in 2026
• Expected impact: Above-average increases; potential 5-10% or more in some areas

West South Central (Texas, Oklahoma, Arkansas, Louisiana)

• Projected increase drivers: Massive demand growth of over 9% due to data centers, AI, and crypto; wholesale rate increases especially in some ERCOT areas
• Expected impact: Modest average (3-5%), but potential for higher effective bills due to demand charges and volatility

Other States Worth Watching (Arizona, Maryland)

• Projected increase drivers: Pending utility rate cases, including a 14% proposal in Arizona, and capacity price jumps (Maryland is PJM-related)
• Expected impact: Localized double-digit hikes possible via approved cases

Other factors are not state-centered but are based on individual utilities. For example, many new data centers are being built in ERCOT in Texas and PJM’s footprint, which includes parts of several states such as Virginia and New Jersey.

Utility rate cases have been proposed and in some cases approved in several places across the country. This year, utilities asked for $29 billion in rate hikes. The figure for 2026 is expected to be even higher.

Finally, projections cannot anticipate changes in weather, policy, and demand. For a time, many data centers were concentrated in Virginia, near Washington, D.C. This type of facility is now being built across the U.S. at a phenomenal rate due to the need for AI data centers.