News Alert: Utility Costs to Rise 10% in 2026 Posted on February 20, 2026 Millions of Americans are set to face higher utility costs this year, driven by increased prices for electricity and gas. Why is my electric bill so high? The Energy Information Administration (EIA) forecasts a 4.2% climb in residential electricity costs for 2026, with the price increase being higher in some parts of the country. According to the EIA’s November report, the price hike will be steepest in the West South Central region, driven by demand from power-hungry data centers and cryptocurrency mining facilities in that region. The recent onslaught of Winter Storm Fern also exacerbated demand while constraining supply, which led to soaring wholesale electricity prices that spiked by as much as 800%. This continues the upward trend for retail electricity costs, which have steadily climbed by 36% over the last five years according to the Bureau of Labor Statistics. Why is my gas bill so high? Homes heated with natural gas can also expect bigger bills this year. The EIA estimates that wholesale gas prices will go up 16% on average this year. The price surge is caused by flat domestic production of natural gas, despite the much higher demand due to colder winter temperatures. In the aftermath of Winter Storm Fern, the country saw record withdrawals of natural gas stocks at the end of January. Based on the EIA’s Weekly Natural Gas Storage Report, working natural gas stocks fell 360 billion cubic feet in the Lower 48 states, the largest weekly net withdrawal ever recorded by the agency. The record demand caused natural gas spot prices to rise to $9.03 per million British thermal units on January 28, going over the week-earlier price by $4.05/MMBtu and the year-earlier price by $5.60/MMBtu. At the height of the winter storm, natural gas consumption in the residential and commercial sectors averaged almost 30% higher than the five-year average for those days, according to Bloomberg. At the same time, the extreme cold brought by the winter storm reduced natural gas production due to equipment freeze-offs and shut-ins, further constraining local supply. Rate Hikes Another factor causing higher utility prices are approved rate increases last year. According to Powerlines, a nonprofit organization that tracks utility expenses, regulators authorized 43 rate hikes in 2025 amounting to $11.6 billion. Most of these price increases have already taken effect, with eight more scheduled to roll out soon. Data from the organization shows that the South will be the most affected, with the region’s utility providers netting 13 approved rate increases, for a total of $8.4 billion in additional charges. Best ways to save on utility bills All in all, the surging demand for electricity and natural gas, combined with approved rate hikes and constrained supply, is expected to cause a 10% rise in utility bills this year, with some regions likely seeing a steeper hike. If you have not done so, then now is the best time to invest in energy efficient HVAC, which accounts for the largest consumption of electricity and natural gas in your home. Check out our related articles below to help offset the impact of higher utilities. A Guide to Our Most Energy Efficient Heaters Energy Efficient AC Units: What to Look for in a High Efficiency AC 8 Practical Tips to Lower your Heating Bill this Winter Mickey Luongo Mickey is the resident heating and air conditioning expert with over 15 years of experience in the industry.
