The hidden factor behind your high electric bill
If you’re like many people in the U.S., in recent years, your electric bill has gone up and up and up — an average of 17% in the last three years.
At the same time, overall inflation has risen by 13%, leaving little extra in people’s wallets to pay for those higher bills.
Meanwhile, the Trump administration and its allies in Congress have mounted roadblocks to solar and wind power, which are often cheaper than coal or fossil gas. The result? Electric prices are expected to rise higher still.
Increased demand from data centers and new manufacturing facilities is one of the reasons electric costs keep climbing. But another factor is also quietly jacking up your bill — climate change.
“The way climate change impacts electricity prices can be different in different parts of the country,” says Ted Kelly, who directs the U.S. clean energy program at the nonprofit Environmental Defense Fund. “But no matter where you live, you’re paying a hefty price.”
Why you’re paying more
On the most basic level, your electric bill is rising because it’s hot out there — the buildup of greenhouse gases in the atmosphere has caused the last 10 years to become the 10 hottest years on record. Almost all of us are using more electricity to cool ourselves down.
That excess heat, and the ways it is warping established weather patterns, is one of the reasons every single person in Texas paid an extra $80 on their electric bill in 2023 compared to 1980, says Texas A&M geosciences professor Andrew Dessler. He is the author of a new study that teases out the impacts of climate change on electric prices in the Lone Star State.
“This is a climate tax we’re all paying,” he says of Texans’ increased bills. “But unlike government taxation that funds public services voters value — like national defense, parks, or deficit reduction — this climate burden provides no benefits to citizens.”
Extreme temperatures are, however, only part of the story. The vast majority of utility customers pay not just for the electricity they use but also for building out and maintaining power plants, transformers and electric lines — what’s generally known as “the grid.”
Blackouts and brownouts occur when people want to use more electricity, typically for cooling but also heating, than the system can supply at a given moment — when it’s 110 degrees in Reno or only 8 degrees in Dallas in February. To prevent that, the electric system needs to be built to accommodate those demand peaks — extra infrastructure that isn’t needed or used most of the time. “Something like 50% or more of the total cost of the system is meeting the very peak demand,” Kelly says. “And because peak demand is higher because of climate change, there’s a lot more money that needs to be spent.”
Moreover, when utilities build new power plants just to cover those moments of high demand, they “are recovering the cost of that equipment over a very small window in the year,” explains Matthias Fripp, director of global policy research at the think tank Energy Innovation. For instance, a $100 million power plant that’s used only 20 days a year needs to charge a lot for the electricity it sells when it operates. Those costs end up on your electric bill.
So do the costs of an electric grid ill-prepared to meet the demands of the current climate-changed world, where temperature extremes are disrupting established weather patterns and the infrastructure designed around them. After 2021’s Winter Storm Uri, when gas- and coal-fired power plants shut down in frigid temperatures and strained the grid, one San Antonio veteran living on Social Security received an electric bill totaling $16,752. He was among many receiving a bill in the thousands.
Environmental news that matters, straight to your inbox
Climate disasters aren’t cheap
Climate change turbocharges destructive wildfires, hurricanes and tornados, which are causing massive damage to our electric grids. To pay for repairs and to bolster the system so that it’s better prepared in the future, utility customers get charged more.
“Something like a third of capital investment that utilities have been making recently has been for that kind of hardening and resilience,” Fripp says, with a proviso. Many utilities make their profits by investing in grid improvements. “It’s not clear how well that [amount] maps onto climate change versus utilities liking to invest in improvements. But, clearly, there’s some need for this.”
Consider Hurricane Helene, which last September plowed through the southern Appalachians, killing more than 230 people, spawning at least 20 tornadoes and causing huge amounts of flooding. North Carolina’s Office of State Budget and Management projected the cost of repairs to the state’s electric system, paid for by everyday consumers, will total $1.4 billion.
Drought, which is also intensified by climate change, impacts electric prices as well, for a couple of reasons. The first is that hydroelectric power, one of the cheaper forms of electricity in the U.S., relies in a significant way on rain and melting snow. When there’s not enough rain or snow melt, hydroelectric power plants have to dial back their production. The gap is then filled by more expensive power plants.
The second reason is that fossil fuel and nuclear power plants rely on fresh water for the cooling process that is essential to their operation. When the bodies of water they rely on dry up, once again power production has to shift to more expensive sources. “When high demand is combined with limited supply,” Kelly says, “that’s when prices spike and brownouts become more likely.”
Wildfires increase electricity costs
In 2018, a 100-year-old transmission line operated by the California utility PG&E sparked the Camp Fire. Dry conditions that were abetted by climate change helped make that fire the deadliest in the state’s history.
After being hit by lawsuits related to the Camp Fire, PG&E was forced to declare bankruptcy. Now, power companies in the arid West are employing extremely expensive measures to reduce risk and potential liability. PG&E, for instance, is burying more than 1,000 miles of power lines in high-risk areas — an effort that can cost between $3.4 million and $6.1 million a mile — costs that consumers, not the utility itself, are paying.
“Wildfire-related costs make up as much as 24% of increased utility rates these days in California alone,” says Kelly, citing a report by the state’s Public Advocates Office.
- Fighting wildfires with fire: Can prescribed burns save our forests?
- A new firefighter launches into space
Clean energy can help keep costs down, if the Trump administration lets it
It turns out the solution to the climate change/high electric bill doom loop is one and the same: clean energy.
Solar power, wind power and battery storage are already holding electric prices down because building new clean energy capacity is generally cheaper than building new gas plants, coal plants and nuclear power facilities. Plus, “there are no fuel costs,” Kelly says.
At a time when demands on the electric grid are growing rapidly, clean energy is also much quicker to deploy. Utilities that want to buy new gas turbines are finding they won’t be ready until the early 2030s, because of a shortage of manufacturing facilities. New nuclear facilities take at least five years to build and often far longer.
By contrast, a new utility-scale solar farm can get built faster. That’s one reason why almost 95% of new electric generating capacity installed in the U.S. last year was clean energy — solar, wind and battery storage. Biden-era rules are also cutting down the time it takes to connect solar and wind farms the grid.
The Trump administration, which campaigned on a promise to reduce consumers’ energy bills by half, is making it far more difficult to build low-cost clean energy. At a time when surging electric demand means prices are only projected to rise, it has worked with its allies in Congress to overturn clean energy incentives and is doubling down on expensive fossil fuels.
“Unfortunately, we can’t change the way climate change has already impacted folks’ electric bills across the U.S.,” says Kelly. "Some of those damages are now already baked into the system. But if we want to think about the future and how we can reduce costs, we’ll pursue cheaper, cleaner renewable energy and leave fossil fuels in the past.”
