What's Really Driving Up Your Electricity Bills? (Hint: It's Not What Politicians Are Saying)

New research reveals the truth behind rising electricity costs—and it's mostly about aging infrastructure, not the energy debate dominating headlines.

As political battles rage over renewable energy and fossil fuels, a recent study from Lawrence Berkeley National Laboratory cuts through the noise with some inconvenient facts: the 23% increase in electricity prices over the past five years has little to do with how we generate power.

The real culprit? The posts and wires that deliver electricity to your home.

Infrastructure, Not Ideology

From 2019 to 2024, utilities across the country have been replacing and expanding aging power lines—and passing those costs directly to consumers. In California, wildfire damage necessitated massive infrastructure replacement. In Florida, hurricanes drove similar investments.

The numbers tell the story: roughly 44% of utilities' capital expenditures in 2023 went to distribution infrastructure. Meanwhile, spending on generation has steadily declined to just 25% of capital expenditures.

What About Renewables?

While renewable energy mandates did push prices up in some states, the study found that most wind and solar development had minimal impact on electricity rates overall. Even when generation costs did spike—like in New England during 2022-2023 when natural gas prices surged following Russia's invasion of Ukraine—those increases proved temporary.

The Political Reality Check

"A lot of the drivers of electricity price increases are outside of the control of any one political power," said Devin Hartman, director of energy and environmental policy at the R Street Institute. The timeline for policy changes to actually reduce costs often extends beyond any single administration.

This reality doesn't bode well for President Trump's campaign pledge to cut electricity prices in half within a year—regardless of one's views on his energy policies.

The Bigger Question

The study raises an important issue that transcends partisan politics: Are investor-owned utilities over-investing in distribution upgrades, for which they receive guaranteed rates of return? Grid experts have long raised this concern, even as political debates focus elsewhere.

As we navigate the clean energy transition, understanding the actual drivers of electricity costs—rather than the politically convenient narratives—becomes essential for developing effective policy solutions.

The full Lawrence Berkeley National Laboratory study provides detailed analysis of electricity price trends from 2019-2024.