Why the Price of Electricity Is Spiking Around the Country


But there are exceptions: Several states that aren’t especially windy and sunny have required utilities to buy more electricity from large-scale wind or solar farms, such as Maine, Maryland, Massachusetts and New York. These requirements, which are often adopted to lower greenhouse gas emissions, can add a noticeable surcharge to bills.

Many states — including California, Maine and Massachusetts — have also offered incentives for homeowners to install rooftop solar panels. These policies can raise prices for other customers, because solar households pay less to the utility but still rely on it for backup power. That shifts the cost of maintaining the grid to other households, utilities say. (Solar proponents disagree, saying that this argument ignores many benefits of rooftop panels, such as avoided transmission costs.)

Rooftop solar policies accounted for roughly one-quarter of the increase in retail electricity prices in Maine and California since 2019, the Lawrence Berkeley study concluded. More recently, California and some other states have begun paring back their home solar incentives.

Yet rising power prices are, in turn, pushing more people toward rooftop solar to lower their bills. Ali Ergun, a 46-year-old hardware engineer, spent around $65,000 this year on solar panels and batteries for his new home in Los Altos Hills, Calif. Solar was not part of Mr. Ergun’s plan when he bought the house, but then he saw his electricity bill, which topped $600 his first month there.

“If you’re at the whims of utility companies’ prices, it’s really a bit nerve wracking,” he said.

Other states have their own stories.

Electricity is expensive in the Northeast because those states rely heavily on imported natural gas and there are a limited number of pipelines into the region, making the fuel costly. (In recent years, New York has blocked new pipelines and closed a nuclear power plant, which deepened the state’s reliance on gas.)

That left the Northeast vulnerable when gas prices skyrocketed in 2022, amid Russia’s invasion of Ukraine. In Maine and Massachusetts, retail prices shot up by more than one-third as a result of these spikes, which have only lately subsided.

In recent months, many communities have become alarmed by the expansion of massive data centers for artificial intelligence, with some critics warning that these power-hungry facilities will increase electricity costs.

And yet in Virginia, home to one of the world’s largest concentrations of data centers, electricity prices have mostly stayed flat over the past six years, adjusting for inflation. If anything, those data centers may have helped suppress prices by allowing utilities to spread the fixed costs of maintaining the grid among a larger set of customers, the Lawrence Berkeley study found.



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