Rising Electricity Costs
Puget Sound Energy Seeks Major Rate Hike Despite Millions in Tax Credits
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Key Points
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Puget Sound Energy filed its rate-plan request with the Washington Utilities and Transportation Commission on Feb. 27, 2026; if approved, the new rates would begin in early 2027 and affect roughly 1.2 million electric customers through three annual rate adjustments.
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Regional pricing patterns complicate the idea that data centers are the main cause of higher household electricity bills: Texas and Virginia host about one-third of U.S. data centers but have residential rates below the national average, while New England—home to relatively few data centers—saw residential prices rise about 40% from 2020 to 2025.
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A model cited in the clean-energy mandate debate estimated Minnesota’s systemwide cost at about $272 per megawatt-hour for wind and $472 for solar after accounting for backup generation, transmission, overbuilding and curtailment—far above the roughly $46-to-$49-per-megawatt-hour projected cost of new natural-gas generation. The figures are modeled estimates rather than market prices.
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Beyond unplugging electronics and shifting usage to off-peak hours, households can reduce consumption by keeping furniture away from heating and cooling vents and limiting unnecessary space-heater, heating and air-conditioning use; fans, open windows, curtains and warmer clothing are suggested alternatives when practical.
Puget Sound Energy filed a request on February 27 for a $28 billion rate hike spread over three years in Washington state. The plan includes 11 new power projects, major transmission upgrades, and over $529 million in federal tax credits to offset costs ABC7, yet household bills would still climb because the capital investments are so massive. The rate changes would affect roughly 1.2 million electric customers if approved by the Washington Utilities and Transportation Commission, with new rates potentially starting in early 2027.
Rising electricity costs reflect a perfect storm: aging power infrastructure, faster retirement of traditional power plants than replacement, new demand from AI data centers, and delays in permitting new generation ABC7. While some blame clean-energy mandates for requiring expensive backup systems, others point out that regional patterns muddy this argument—Texas and Virginia host one-third of U.S. data centers but have below-average residential rates, while New England has relatively few data centers yet saw rates jump 40% between 2020 and 2025.
America's Aging Grid Triggers Broad Upgrade Effort
The U.S. power grid is straining under pressure from both aging infrastructure and surging demand. The Department of Energy announced plans to spend nearly $2 billion upgrading the grid across 26 states and 31 projects to support AI growth and reduce costs for about 100 million Americans ABC7. Puget Sound Energy's three-year plan exemplifies this national push: the company proposes 11 new power projects and transmission upgrades to handle rising demand in Washington state.
When Cleaner Energy Comes With Hidden System Costs
Clean-energy critics argue that wind and solar require far more expensive backup than standard estimates suggest. A Minnesota model calculated systemwide costs at roughly $272 per megawatt-hour for wind and $472 for solar after factoring in backup generation, overbuilding, transmission, and curtailment ABC7. By contrast, new natural-gas plants cost only $46 to $49 per megawatt-hour. These figures are modeled estimates, not market prices, and remain hotly contested among energy experts.
How Permitting Delays and Retirements Squeezed Supply
The United States retired traditional power plants—coal and nuclear—faster than it built replacements, creating a tight supply-demand balance ABC7. Permitting delays have slowed construction of new natural-gas plants, transmission lines, and renewable facilities. This mismatch between retiring old capacity and building new capacity has pushed wholesale prices higher and forced utilities like Puget Sound Energy to invest heavily in infrastructure upgrades to meet future demand.
Cutting Bills Means Unplugging and Shifting When You Use Power
Households can lower individual electricity costs without waiting for grid upgrades. Eliminate standby power drain by unplugging electronics, improve lighting and appliance efficiency, and shift usage to off-peak hours where utilities offer lower rates ABC7. Also keep furniture away from heating and cooling vents, limit space heater use, and consider fans, open windows, and extra clothing as alternatives. Even small changes across millions of homes add up to measurable grid relief.
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