Grid upgrades will soon raise energy bills by $600/year for residents of this 1 northern state. Will steep rate hikes become the norm nationwide?

How will these price increases work, and why are utility costs rising in the first place? We dug into the numbers.

A 31% jump in electric rates, and higher gas costs

National Grid customers will see prices rise over the next three years, with a 10% increase rolling out immediately, and more increases coming in the following two years. Under the PSC’s three-year plan, electric delivery charges will climb 31% while natural gas delivery fees will increase 40%.

For the average household, that means an extra $264 in the first year alone. Currently, an average National Grid customer pays about $2,600 per year for combined electricity and gas.

National Grid says the increases are necessary to meet increasing energy demands as well as modernize aging infrastructure and maintain safe and reliable service. The company states that it plans to spend $4 billion on the upgrades, which includes hiring 480 new employees, and investing $1.4 billion in upgrading its electric network and $351 million into gas systems in the first year.

Despite a unanimous vote for the project, not everyone is on board. Consumer advocates like lawyer Theresa Hotte of the Public Utility Law Project warn the hikes will be “devastating for households already living on the edge.”

The new plan sets aside more than $290 million in bill discounts for income-eligible households across Upstate New York, including about $72 million in the first year alone. While this money is designed to give struggling families more breathing room, more than 225,000 National Grid customers are already at least two months behind on payments, with total arrears exceeding $362 million.

Why energy prices are rising nationwide

Upstate New York’s hikes are part of a larger story: electricity prices are climbing across the U.S. The U.S. Energy Information Administration reports the average U.S. monthly residential electric bill rose to $144 in 2024, up from $122 in 2021.

There are several factors behind these higher costs: