The utility bill ratchet

Natural gas is the biggest fuel for U.S. power plants, so it's tempting to assume electricity bills follow it. This chart shows otherwise.

Spot natural gas at Henry Hub surged to $8.81 per million BTU in August 2022, fell to $1.49 by March 2024, and was $2.89 in July 2026, below its 2019 level. Heating oil swings even harder: its price nearly doubled between February and March 2026.

Electricity went one direction. The average U.S. retail price was 14.7 cents per kilowatt-hour in January 2022 and 19.7 cents in July 2026, up 47% since before the pandemic.

Retail power rates are set through regulatory proceedings that pass costs on slowly and rarely give them back. Utilities have been spending heavily on grids and transmission, and fast-growing demand, including from data centers, is often cited as adding pressure. Fuel is only part of the bill, and it isn't the part that has been rising.