Climate Crisis And Fossil Fuels Are Fueling Power Price Spikes

States with high levels of wind and solar generation have seen the lowest rate increases

Rising utility bills are a huge concern for U.S. families – ⅓ of households had to forego basic necessities to pay energy bills last year, and economywide electricity prices have risen nearly 20 percent since the beginning of 2021

But Energy Innovation research finds the biggest culprits behind rising utility bills include fossil fuels, not clean energy. In fact, states with high levels of wind and solar generation like New Mexico, Iowa, and Oklahoma have experienced the lowest rate increases.

And extreme weather shows how burning those fossil fuels accelerates the climate crisis and spike power prices. Disasters like the Los Angeles, Maui, and Oregon wildfires all have a direct link to consumer costs as utilities rebuild their grids and resolve lawsuits.

The data is clear - the biggest factors causing electricity bills to rise include:

• Wildfire costs and risk driving up prices

• Natural gas price volatility in regions heavily dependent on the fuel

• Utility investments in aging, uneconomic coal plants

• Transmission and distribution costs rising faster than inflation

• And utility business models favoring big capital expenditures

Only looking at national average electricity prices obscures real trends as well. Between 2021 and 2023, electricity prices increased faster than inflation in only 15 states, and those were states particularly vulnerable to wildfires (i.e., California), natural gas volatility (i.e., Massachusetts), or heavily dependent on coal (i.e., West Virginia).