Utility Regulators Signed Off on $9.7 Billion in Electricity Rate Increases Last Year: EIA

Net electricity rate increases signed off by U.S. state utility regulators reached $9.7 billion in 2023, up from $4.4 billion authorized in 2022, according to a Sept. 9 report published by the U.S. Energy Information Administration. Net electricity rates are expected to be lower in 2024 compared to 2023, however significantly higher than previous years. Electric utilities are attempting to recoup costs outlaid in recent years that were required to maintain and expand the electricity network.

In the last two years, U.S. electric utilities have requested rate increases to pay for enhancements to transmission and distribution lines to endure volatile weather and fire events, increase energy reliability and arrange for increased electrification as both state and federal clean energy legislation is implemented.

Over a third of the net rate increases was due to two Californian utilities,  Pacific Gas and Electric and Southern California Edison, seeking to make their electricity grids less vulnerable to wildfires. The funding was mainly for wildfire protection and included financing for vegetation management and underground wiring.  For the Jan. 1, 2023 to Aug. 12, 2024 period, regulators across the U.S. have signed off 58 percent of the net rate increases that were sought by electric utilities. The agency expects net rate increases to total $8.9 billion during 2024, on the assumption that the same ratio of rate increases is applied for the remainder of 2024.

The Illinois Commerce Commission signed off a $759 million rate increase to ComEd for grid infrastructure enhancements essential to comply with the state’s climate goal of transitioning to 100 percent clean energy by 2050.

The New York Public Service Commission signed off a $442 million rate increase to Consolidate Edison so that the company can develop the electricity network grid so that it can withstand more regular and volatile weather events and fulfil the state’s goal of producing 70 percent of electricity from renewable energy sources by 2030. The North Carolina Utilities Commission granted Duke Energy Carolinas a $436 million rate increase to fund existing and planned energy system investments so that the state can reach their goal of net zero emissions by 2050.