2026 – 2025 Electricity Price Forecasts

Electricity Price Forecasts for 2025 and 2026

Electricity prices in the U.S. are projected to continue their upward trend through 2025 and into 2026, driven by increasing demand, fuel costs and infrastructure investments. Here's an overview of the forecasts for these years:

U.S. Electricity Price Forecasts (2025–2026)

📊 Retail Electricity Prices

• 2025: The average residential electricity price is projected to be approximately 17.0 cents per kilowatt-hour (kWh).

• 2026: An increase to about 17.6 cents per kWh is expected, marking a 3.5% rise from 2025.

⚡ Wholesale Electricity Prices

• 2025: The national average wholesale price is estimated at $45 per megawatt-hour (MWh), a 19% increase from 2024.

• 2026: While specific figures are not provided, the upward trend is expected to continue, influenced by factors such as increased demand and fuel costs.

🏭 Natural Gas Prices

• 2025: The Henry Hub natural gas spot price is expected to average $4.12 per million British thermal units (MMBtu).

• 2026: Prices are forecasted to average $4.80/MMBtu, up from previous estimates, driven by increased demand and export activities.

As commercial energy buyers navigate an increasingly volatile market, understanding where electricity prices are headed in 2025 and 2026 is more important than ever. With energy costs being one of the top three operating expenses for most businesses, informed decisions around procurement and risk management are crucial.

Here's a comprehensive look at where electricity prices are going and why so businesses can stay ahead of the curve.

📈 2025 Electricity Price Outlook

Retail Price Forecast:

• Average U.S. commercial rate: 17.0 cents per kWh

• This represents a 3%–4% increase over 2024, primarily due to rising infrastructure and fuel costs.

Wholesale Price Forecast:

• Average wholesale market rate: $45/MWh (up 19% from 2024)

• ISO-NE (Northeast): $55/MWh

• ERCOT (Texas): Potential drop to $30/MWh due to solar buildout

• CAISO (California): Up to $65/MWh in summer peaks

Key Drivers:

• Natural gas prices: Expected to average $4.12/MMBtu, up due to global LNG exports and colder winter outlooks.

• Demand boom: Commercial demand is growing, especially in sectors like logistics, cloud computing, and manufacturing.

• Grid constraints: Aging infrastructure + electrification pressures = volatility.

📈 2026 Electricity Price Outlook

Retail Price Forecast:

• Average U.S. commercial rate: 17.6 cents per kWh

• Rising another 3.5% over 2025, largely due to fuel inflation and higher demand.

Wholesale Market Trends:

• Prices likely to surpass $48/MWh nationally, with significant regional disparity.

Key Drivers:

1. Increased Electricity Demand

   • Projected U.S. consumption: 4,252 billion kWh

   • Driven by:

     • AI/data center buildout (energy-intensive)

     • Commercial real estate rebound

     • EV charging network expansion

2. Fuel Cost Volatility

   • Natural gas forecast to hit $4.80/MMBtu due to continued export growth, production caps, and international competition.

3. Extreme Weather Risks

   • Higher likelihood of price spikes in peak months (summer & winter) due to heatwaves, cold snaps, and transmission congestion.

4. Policy and Regulatory Shifts

   • ESG mandates, carbon pricing, and renewable portfolio standards are reshaping utility strategies—and rate structures.

🏢 Why It Matters for Commercial Businesses

📊 Budgeting and Procurement

Locking in multi-year energy contracts today could protect against future rate hikes—especially in volatile regions like the Northeast and California.

⚡ Energy Efficiency and Resilience

Investing in:

• LED lighting

• Demand-response programs

• On-site solar or storage
  can help reduce exposure to high peak charges and grid disruptions.

🔍 Supplier Shopping in Deregulated States

Businesses in Texas, New York, Illinois, Pennsylvania, and other deregulated states can still shop for better commercial electricity deals. Comparison platforms like Bid On Energy make it easy to access multiple supplier offers and secure long-term savings.

📌 Takeaway for 2025–2026

Electricity costs are climbing—and will continue to do so through 2026. Businesses that plan early, procure smartly, and invest in energy resilience will gain a serious edge in this tightening market.

For personalized forecasts or supplier comparisons in your area, contact Bid On Energy at 302-360-8110 or visit Commercial Electricity Supply.