Why Your Energy Rates Keep Increasing—And How to Fight Growing Bills
If your energy bills keep going up, you’re not alone. Business owners across the country are facing higher costs even as they try to use less energy. Over the past several years, it’s become a fact of life that the cost of energy is continually increasing. In fact, electricity prices have increased faster than the rate of inflation since 2022, and they are expected to keep increasing at least through 2026.
In May 2025, overall consumer prices in the U.S. rose 2.4% year-over-year, yet power costs increased 4.5%. Experts have predicted that air-conditioning bills will be 4% higher this summer than they were last year. Certain regions are likely to experience even higher price hikes: the Pacific, Middle Atlantic, and New England regions (where energy prices are already higher) could increase more than the national average.
And it’s not just the base rates going up. Utilities are also introducing more complex billing structures. Time-of-use pricing and demand charges can cause bills to spike depending on when and how much energy you use, making it even harder for businesses to manage costs.
These higher energy rates mean that if you use the exact same amount of energy you used in the past, your bills will be higher. In many cases, rate increases are so steep that even if you use less energy than you did last year, the amount you have to pay may still be higher (though by lowering your energy usage, the cost will be significantly lower than if you used the same amount). This is incredibly frustrating, but it highlights the increasing importance of energy efficiency to keep bills as low as possible despite skyrocketing costs.
So why have energy rates been on the rise for so many years? There are a few key factors.
RISING ENERGY DEMAND
Energy usage is increasing, and supply is struggling to keep up with demand. The proliferation of artificial intelligence (AI) data centers has begun to exacerbate this problem, as they are extremely energy intensive, often using the same amount of energy as an entire small city. Experts predict that by 2030, the energy demand of data centers will equal the electricity needs of 20 million homes.
New plants need to be made to generate more energy, but they aren’t being built fast enough. Worse yet, new federal rules are aiming to remove tax credits for solar and wind energy, limiting the speed at which renewables can help offset energy demand.
This disparity between supply and demand of energy causes energy prices to soar, and with hot summer months arriving, the problem will only get worse. Home electricity bills are expected to reach a 12-year high over the 2025 summer. Business locations are facing increases, too.
PAYING FOR OUTDATED INFRASTRUCTURE
Aging infrastructure is another issue. Outdated electric grid infrastructure that was built in the 1960s and 1970s is starting to show its age, with increasing outages and reduced load carrying capacity. Old equipment also increases risks of adverse events like widespread blackouts and fires, and it impacts costs. In recent years, the issue has gotten worse: the American Society of Civil Engineers recently rated U.S. energy infrastructure at D+, which is lower than the C- score it received in 2021.
Upgrades are crucially needed, and utilities are starting to spend more to improve infrastructure for energy generation and delivery. Despite this, though, these companies don’t want to lose money, so they are offsetting their spending by charging customers more. By increasing energy rates, they can essentially make customers pay for these infrastructure projects and avoid lost profits.
In the long run, better infrastructure is crucial to helping America’s energy problems. But utility customers are having to foot the bill through higher monthly charges.
GROWING COST OF NATURAL GAS
Natural gas prices have been high for years, and in early 2025 they hit a two-year peak due to increased demand caused by extreme weather over the winter months. The higher usage led to lower stores of natural gas, which in turn made prices more volatile. This has exacerbated the already-rising natural gas costs that began when Russia invaded Ukraine.
Though according to the World Bank, the U.S. benchmark price for natural gas declined slightly in April and May, they still predict overall increases through 2025 and 2026. The cost of natural gas factors into consumer energy bills, and we are seeing the result in bigger bills.
THE SOLUTION? ENERGY EFFICIENCY COMBATS RISING PRICES
There are large-scale solutions needed to quash growing energy prices. At Budderfly, we recommend that you contact your local representative to advocate for lower utility rates. But barring government intervention, what can businesses do in the meantime to keep their monthly energy costs from growing? The answer is simple: energy efficiency.
Using less energy is a simple way to lower the amount you have to pay. Even if rates increase, you can keep growing bills in control. Depending on increases in your region, your bill still may be higher than 2024. But using less will make a significant difference in how much that increase is.
High-efficiency HVAC units, LED lighting, refrigeration controls, smart thermostats, and other technologies can help your facility reduce its energy consumption, and on-site solar can further reduce your reliance on expensive grid-sourced energy. At Budderfly, we help businesses access these energy-saving solutions without having to invest any money upfront. Plus, we try to help lower rates for our customers when possible. In deregulated electricity markets, Budderfly engages with suppliers to secure the best available rates.
Want to learn more about how we’ve paid for and installed cutting-edge energy efficient technology at thousands of businesses across all 50 states? Contact us today.