If it feels like your utility bills are climbing no matter what you do, you’re not imagining it.

Across the U.S., energy costs are rising faster than overall inflation, and experts agree that it isn’t a short-term problem tied to one cold snap, one new technology, or one policy decision. Instead, a combination of aging infrastructure, extreme weather, fuel volatility, and growing electricity demand is reshaping what homeowners can expect to pay to heat and cool their homes.

In this article, we’ll cover why energy costs are increasing and what homeowners can realistically do to limit their impact.

Key Points: Rising Energy Costs

• U.S. electricity prices have increased faster than inflation since 2022 and are expected to continue rising through at least 2026.
• Higher natural gas prices are driving up wholesale electricity prices, which eventually affect residential utility bills.
• Aging power grid infrastructure, climate-driven weather events, fuel price volatility, and growing electricity demand all contribute to higher utility bills.
• Electricity is one of the largest ongoing household expenses, second only to gasoline.
• Homeowners can’t control utility rates, but they can control how much energy their home wastes.
• Homeowners can’t control energy markets, but they can reduce how much energy their home wastes.
• Creating an effective air seal helps reduce heating and cooling demand, limiting exposure to rising energy costs over time.

Energy Prices Are Rising Faster Than Inflation

Recent reporting from Yahoo Finance shows electricity prices continuing to rise faster than overall consumer inflation.

While prices for fuels like gasoline and heating oil have fluctuated or declined since their pandemic-era peaks, electricity prices have continued a steady upward climb.

Updated data from the U.S. Energy Information Administration reinforces this trend. Retail electricity prices have increased faster than inflation since 2022 and are expected to keep rising through at least 2026. Regions that already face higher-than-average electricity prices – including New England, the Middle Atlantic, and Pacific states – are projected to experience some of the largest increases.

Unlike fuel prices that swing up and down, electricity costs tend to rise gradually and persistently, making long-term efficiency improvements increasingly important for homeowners.

Wholesale Electricity Prices Rose in 2025 – and Why That Matters

In February 2026, the EIA reported that average wholesale day-ahead electricity prices at most major U.S. trading hubs were higher in 2025 than in 2024, driven largely by rising natural gas prices.

• The largest increase occurred in New England, where prices rose by $29 per megawatt-hour (MWh).
• While some regions saw smaller increases or modest decreases, the overall national trend moved upward.

Wholesale electricity prices reflect the day-ahead and real-time cost of supplying power to the grid. Although most homeowners don’t pay real-time electricity prices, these wholesale costs form the foundation for the seasonal and averaged rates utilities charge residential customers.

In other words, homeowners may not see daily price swings; instead, sustained wholesale-level increases eventually show up in their monthly bills.

Natural Gas Prices Have an Outsized Influence on Electricity Costs

Natural gas plays a central role in U.S. electricity pricing, setting the marginal price of electricity during most hours in most regional markets.

According to the EIA:

• Henry Hub natural gas prices averaged $3.52 per MMBtu in 2025.
• That’s 56 percent higher than in 2024, when prices were at inflation-adjusted record lows.
• In the Northeast, natural gas prices averaged about twice as much as the year before.

When natural gas prices rise, wholesale electricity prices tend to rise with them. Even though utilities spread these costs out over time, sustained fuel price increases translate into higher retail electricity rates – particularly during periods of high heating or cooling demand.

Why Rising Wholesale Prices Still Affect Homeowners

Wholesale electricity prices fluctuate daily, but most residential customers pay rates based on seasonal or averaged costs, not real-time pricing.

That doesn’t shield homeowners from higher prices – it delays them.

As wholesale electricity prices remain elevated year over year, utilities recover those costs through future rate adjustments. The result is steadily rising utility bills, even for households that haven’t changed how much energy they use.

This explains why many homeowners experience higher bills even during relatively mild weather or when their energy habits stay the same.

Aging Infrastructure Continues to Push Costs Higher

America’s electric grid is old.

Many components responsible for delivering power, including wires, transformers, poles, and substations, were built more than 50 years ago, with some nearing 80 years in service.

Utilities are investing billions of dollars annually to:

• Replace aging equipment
• Upgrade delivery systems
• Maintain reliability as demand grows

According to the Yahoo Finance report, these infrastructure investments are a major contributor to rising electricity prices, and the costs are ultimately passed on to consumers through utility rates.

Climate Change and Extreme Weather Add Long-Term Pressure

Extreme weather events are becoming more frequent and more costly.

Utilities must pay for:

• Storm recovery and repairs
• Wildfire mitigation
• Flood and hurricane resilience
• Long-term grid “hardening” projects

These costs vary by region but increasingly appear in utility bills as temporary surcharges or long-term rate increases. Climate-related expenses are no longer one-time events – they’re becoming a built-in part of electricity pricing.

Electricity is One of the Largest Household Energy Expenses

According to the U.S. Bureau of Labor Statistics, U.S. households spent an average of about $1,760 on electricity in 2023, making it the second-largest energy expense after gasoline.

While electricity prices tend to rise more gradually than gasoline prices, their steady upward trend means inefficiencies inside the home become more expensive over time.

What Homeowners Can Control: Energy Loss Inside the Home

Homeowners can’t control fuel markets, grid upgrades, or climate patterns, but they can control how much energy their home wastes.

One of the biggest contributors to high energy bills is air leakage.

Air leaks allow conditioned air to escape through:

• Wall cavities
• Attics and crawl spaces
• Rim joists
• Plumbing and electrical penetrations

As electricity prices rise, every bit of heated or cooled air that escapes costs more than it did the year before – and will cost even more in the years ahead.

Why Air Sealing Matters More as Energy Prices Rise

Air sealing reduces uncontrolled air movement, which helps heating and cooling systems operate more efficiently.

When a home is properly air sealed, it can:

• Reduce heating and cooling demand
• Improve comfort throughout the home
• Lower strain on HVAC systems
• Limit long-term exposure to rising utility rates

Unlike short-term behavioral changes, air sealing delivers consistent, long-lasting benefits regardless of how energy prices fluctuate.

The bottom line: Utility bills are rising because of large-scale forces homeowners can’t control, like aging infrastructure, climate impacts, fuel price volatility, and increasing electricity demand.

But how much those rising costs affect your household depends heavily on how efficiently your home holds onto conditioned air.

As electricity prices continue to outpace inflation, creating a tight, well-sealed building envelope is no longer just about comfort. It’s one of the most practical ways homeowners can protect themselves from rising energy costs over the long term.

If you want to learn more about how to make your home more energy efficient, check out our Learning Center.

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Frequently Asked Questions About Rising Energy Costs and Air Sealing

Why are my energy bills going up even when I haven’t changed how much energy I use?

Energy bills are rising due to factors outside a homeowner’s control, including aging utility infrastructure, higher natural gas prices, climate-related repairs, and increased electricity demand.

Even if your usage stays the same, higher wholesale and retail electricity costs can still increase your bill.

How do wholesale electricity prices affect my monthly utility bill?

Wholesale electricity prices reflect the cost utilities pay to generate and supply power.

While homeowners don’t pay these prices directly, utilities recover higher wholesale costs over time through seasonal or averaged residential rates, which leads to higher monthly bills.

Why does natural gas impact electricity prices so much?

Natural gas sets the marginal price of electricity during most hours in most U.S. markets.

When natural gas prices rise, wholesale electricity prices often rise with them – even in homes that don’t use gas for heating.

Are electricity prices expected to come back down?

Current forecasts from the U.S. Energy Information Administration show electricity prices continuing to rise through at least 2026.

While short-term fluctuations may occur, long-term trends point toward continued upward pressure.

What parts of my home lose the most energy?

Common areas of energy loss include:

• Attics and crawl spaces
• Wall cavities
• Rim joists
• Gaps around plumbing, wiring, doors, and windows

Even small air leaks can add up to significant energy waste over time.

How does air sealing help lower energy costs?

Air sealing reduces uncontrolled air movement, keeping heated and cooled air inside your home longer

This lowers heating and cooling demand, improves comfort, and helps protect against rising energy costs year after year.

Is air sealing different from insulation?

Yes.

Insulation slows heat transfer, while air sealing stops air movement. A home can be well insulated but still inefficient if air leaks are not properly sealed. The two work best when used together.

Is air sealing a short-term or long-term solution?

Air sealing is a long-term efficiency improvement.

Once properly completed, it continues to reduce energy loss regardless of changes in fuel prices, weather, or utility rate increases.