Although U.S. average retail electricity prices were mostly flat over the past several years when taking inflation into account, residential customers have seen their prices rise faster than inflation.
With most categories of utility costs increasing between 2019 and 2023, including distribution CapEx growing by 50% and double the rate of inflation, some customers are certainly feeling the effects.
A new Berkeley Lab report, Retail Electricity Price and Cost Trends: 2024 Update, summarizes recent trends in retail electricity price levels and price drivers in the United States. National, regional, and state trends were reported for 2019 through 2023, using publicly-available data for: average retail electricity prices, retail sales, and utility revenues; utility capital expenditures, operations, and maintenance costs, and fuel and purchased power costs; and retail electricity sales impacts from behind-the-meter resources. The report also includes qualitative case studies highlighting recent and/or regionally specific issues contributing “significantly” to retail electricity price trends.
The report is intended to serve as a reference document for the decision-makers impacted by changes in retail electricity prices and to provide a factual basis for assessing recent changes in retail electricity prices and key underlying drivers. The report is not, however, intended to track changes in retail rate structures; precisely quantify how each driver has impacted retail electricity prices; or address every factor impacting rates, especially those that are utility-specific.
Retail electricity prices reflect the direct costs to generate and deliver electricity to consumers, including capital expenditures, fuel and power purchase costs, financing costs, and more. The report focuses on the past five years, which Berkeley Lab argues is long enough to see broad trends and capture price changes made through periodic rate cases.
The report also indicates that load growth, such as from data centers or manufacturing facilities, was not a major driver of recent cost growth at the national level, but some states and utilities have seen “significant” recent load growth and forecast continued growth into the future.