Feeling the sting of a higher electricity bill lately? You’re not alone. Across the country, power prices are climbing faster than inflation, leaving many to wonder why they’re paying more for the same service and what, if anything, can be done about it.
What’s Driving Higher Power Costs?
The sticker shock on your monthly bill isn’t random; it’s the result of several converging trends. The fundamental issue is a growing imbalance between energy supply and a rapidly increasing demand from population growth and new technologies.
- Surging Demand: Beyond simple population growth, the massive energy needs of AI data centers are putting an unprecedented strain on the grid.
- Stagnant Supply: As old power plants are decommissioned, the construction of new ones has not kept pace, creating a supply bottleneck. As one user noted:
…the reason is mostly a combination of population growth, shutting down old power plants, and not building enough new power plants.
- Soaring Rates: The impact is clear. In California, for example, rates have nearly doubled in just a few years. One commenter shared their experience: “In California our rate in 2019 with PG&E was $0.20/kWh – in 2025 it’s $0.38/kWh.”
- Infrastructure Costs: Utilities are passing the costs of grid upgrades directly to consumers, but the ownership of these assets remains a contentious issue.
Why the System Feels Broken
While supply and demand explain part of the story, many feel the system itself is structured against the consumer. The core of the frustration lies in the unique business model of utility companies and a slow pivot to modern solutions.
- Perverse Incentives: Unlike normal businesses that profit by cutting costs, regulated utilities often profit more when their costs increase, as they can charge a fixed percentage on top of their expenses.
Normal businesses make more money when they cut costs. Utilities (typically) get to charge a fixed upsell percentage and so they make more money when they increase their costs.
- Consumer-Funded Private Assets: A major point of contention is how consumers pay for infrastructure upgrades that ultimately become private assets owned by the utility’s board, not the public who financed them.
…Con Ed gets approval to pass infrastructure upgrade costs directly to consumers, but at the end of the financing period the asset is mysteriously owned by their board of directors, not the public who paid for it.
- Slow Renewable Adoption: Many argue that the U.S. has been too slow to embrace wind, solar, and battery storage, technologies that could provide cheaper, more resilient energy.
We are on a hockey puck graph for all of them because they are inevitable and vastly better. The only thing our head in the sand push against these technologies is doing is ensuring that we will be decades behind China…
The Path to Cheaper, Cleaner Power
The good news is that rising prices are creating powerful incentives for change, both at the individual and policy level. A combination of technology and smart policy offers a way forward.
- Home Energy Independence: The most direct solution for homeowners is investing in solar panels and battery storage. This not only lowers personal energy bills but also reduces strain on the grid.
In an ideal world this should incentivise more people with single family homes and capital to invest in Solar + batteries… the breakeven time will still be less than 10 years.
- Government Subsidies: Other countries provide a model for accelerating this transition. In Australia, government support is making home batteries more accessible.
Here in Australia, the government is providing subsidies to households for buying batteries… After paying $15k (after subsidies) for a 40kWh battery… Our total annual energy bill will be approximately $500.
- A Virtuous Cycle: As more people adopt solar and reduce their reliance on the grid, it forces utilities to adapt. One commenter calls this a “virtuous cycle” that accelerates the shift toward decentralized, renewable energy.
- Building More Capacity: Ultimately, a core part of the solution is straightforward: build more power plants to meet demand, whether they are nuclear, natural gas, or large-scale renewable projects.
