Why Your Power Bill Keeps Rising: What Owners Can Do About It
If you manage buildings for a living, you have probably had the same moment in the last year: you open a utility bill, spot a higher total, then start hunting for the explanation. The culprit is rarely one dramatic line item. It is a stack of small ones (riders, fuel adjustments, storm charges, delivery upgrades) that quietly turn electricity into a bigger operating expense month after month.
By Keith Reynolds | Publisher & Editor, ChargedUp!
The trend is real in the national data. The U.S. average price of electricity sold to commercial customers rose from about 12.35 cents/kWh to 13.19 cents/kWh year over year (November 2024 to November 2025), roughly a 7% increase.
For real estate, that matters more than any single headline about EVs or data centers. Electricity is not just a sustainability line. It is a cost of occupancy, a tenant experience issue, and, increasingly, an underwriting assumption.
A lot is driving prices, but the outcome is simple
There are multiple forces pushing bills higher, and they are overlapping:
1) The grid is getting rebuilt while demand is growing.
Utilities are replacing aging infrastructure and expanding capacity at the same time the load grows. Think more air-conditioning, more electrification, more computing. A January update from the Energy Information Administration projected U.S. electricity consumption rising again after hitting record highs, with growth tied partly to data centers and broader electrification.
That expansion is expensive. A major Brattle report frames the national transmission buildout as a large, sustained investment cycle, driven by reliability needs and the generation mix.
2) Extreme weather is no longer rare, and recovery shows up on bills.
Storm hardening, wildfire mitigation and post-event restoration costs do not stay inside a utility’s balance sheet. They often become riders and rate cases, exactly the kind of add-ons that owners see as “why is delivery up again?” This is part of why regional price pain can feel different: coastal storm exposure, wildfire risk and ice events drive different spending programs.
3) Equipment bottlenecks raise project costs and stretch timelines.
Even if a utility wants to build faster, the supply chain is not always cooperating. The industry has warned for several years about long lead times for large transformers and other essential gear — the physical backbone behind new feeders, substations and interconnections. When the queue for equipment stretches, projects cost more, take longer, and can create knock-on congestion that affects local delivery charges.
4) Data centers matter — not everywhere equally, but enough to change planning.
This is where the conversation gets emotional in the public arena, but for CRE the practical point is concentrated load. In a widely cited estimate, U.S. data centers accounted for roughly 4.4% of U.S. electricity use in 2023, and the Department of Energy projected that share could rise to 6.7% to 12% by 2028.
Whether your market is a hotspot or not, big-load growth changes how utilities plan and how regulators debate “who pays,” which ultimately affects commercial tariffs and development schedules.
What this means at the property level
Here is the good news: while the causes are complex, the response does not have to be.
Scott Sklar, a longtime distributed-energy advocate and professor who works on commercial and public-sector projects, put it plainly in a recent interview: “It’s always less expensive to save energy than generate it.” That is not a slogan. It is a budgeting strategy.
Owners do not need to become engineers. But you do need an operating plan that treats electricity like a managed input, not a fixed bill.
Start with the “shape” of your load, not just the total.
Most large commercial tariffs penalize peaks. A 15-minute spike can set a demand charge for the month. That is why EV charging, electrified heating and cooling, and tenant process loads can change bills even if annual usage looks “fine.” The goal is to avoid unnecessary peaks — especially in late afternoon and early evening when the grid is tightest.
Make efficiency and controls your first capital conversation.
If your building automation system cannot coordinate HVAC, ventilation schedules, and major loads, you are paying the “dumb building tax.” Controls are not glamorous, but they are often the fastest way to flatten peaks without disrupting tenants.
Treat storage and managed charging as NOI defense — not just resilience.
Batteries are often pitched as backup power. For many properties, the economics start with peak shaving and demand management. The moment rates rise, storage can pencil faster — and analysts are explicitly tying higher electricity rates to improved payback for commercial solar and storage projects.
Write better lease language now, before the next renewal cycle.
When energy costs rise, the tenant-landlord friction rises with them. If you host fleets, large office users, or any high-load tenant, your leases should clarify: who pays for upgrades, how demand charges are allocated, and whether you can manage loads (with guardrails) to control costs without degrading tenant experience.
The takeaway
The macro picture is messy: grid reinvestment, extreme weather, equipment constraints and new load growth are all arriving at once. But your action plan does not need to be complicated.
For most portfolios, the winning approach is a practical stack: efficiency first, smarter controls, managed EV charging, and — where it pencils — behind-the-meter storage and on-site generation. Electricity is becoming a bigger line item. Buildings that can manage it will protect NOI and lease faster than buildings that simply absorb the increases.
Citations:
EIA average retail price of electricity (Table 5.6.A):
https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a
Reuters (Jan. 13, 2026) — US power use to beat record highs in 2026 and 2027, EIA says:
Reuters — US data center power use could nearly triple by 2028, DOE-backed report says
Brattle Group report — Transmission Landscape and Outlook:
Transformers in 2026: Shortage, Scramble, or Self-Inflicted Crisis?
https://www.powermag.com/transformers-in-2026-shortage-scramble-or-self-inflicted-crisis
pv magazine USA (Jan. 14, 2026): Electricity rate hikes slash commercial solar payback periods by 33%, says Wood Mackenzie:
