The Top Eight Takeaways from the Lawrence Berkeley/Brattle Factors Influencing Electricity Prices Study

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In mid-October 2025, Lawrence Berkeley National Labs (LBNL) and the Brattle Group released a study called “Factors Influencing Recent Trends in Retail Electricity Prices in the United States.”

Several of our readers reached out to us for our perspective, so here are our thoughts on the most interesting slides from their presentation and some light commentary on each of them that may turn into longer articles in the future.

1. Electricity Prices are Up 23 Percent Since 2019, Up 32 Percent Since 2010

LBNL and Brattle show graphs depicting the cost of electricity increasing 32 percent, in nominal terms, since 2010 and up 23 percent since 2019. The graph also shows that inflation-adjusted power costs have fallen since 2010 and were the same as in 2019.

It feels like there is a movement by wind and solar advocates to explain away rising nominal power costs by simply blaming it on general “inflation.” However, we have a pet theory that merely adjusting electricity prices for inflation when looking at trends in cost-of-service areas oversimplifies the issue of rising electricity prices, because much of this system of utility regulation is inherently deflationary—especially during times of low load growth, when new resources aren’t required to meet rising demand.

Our reasoning is that much of the capital spent on the power plants currently on the system was deployed decades ago, and the depreciation costs on existing plants aren’t subject to the inflationary pressures, except for the revenue requirement and rate of return.

The only capital subject to rising prices has been on new builds, and while some of these new builds are required in the natural course of replacing old generators, the vast majority of new capacity in recent years has been to meet state mandates for renewable energy or carbon emission reductions—not to meet rising demand.

As you can see from the chart below, from 2010—2020, the U.S. electric grid built over 450,000 megawatts (MW) of new capacity even though generation was relatively flat or falling during the same period. Roughly half of these builds were wind and solar, while another 40 percent were natural gas facilities used to replace coal plants that were retired prematurely. By explaining away rising prices on inflation, one misses the fact that prices could’ve been even lower without this massive buildout of power facilities during a time of stagnate demand growth.

That leaves fuel, which is generally flat in nominal terms, or down in inflation-adjusted terms over the last ten years, and other expenses that may also be affected by inflation, such as O&M, staffing, property taxes, and insurance.

As a result, we tend to prefer looking at power-sector trends in nominal terms, but most of the slides below are adjusted for inflation.

2. States with Renewable Energy Mandates Saw Price Increases

No surprises here, the states where government policies require them to purchase renewable electricity saw price increases stemming from those policies. In total, 29 states and Washington D.C. have these mandates, so it will be interesting to dig into the underlying data for this slide to see how they all measure out.

3. States With High Wind Production Didn’t Have Higher Prices

This has been one of the most effective talking points of the wind and solar crowd over the last few years. From Hannah Ritchie to Politico, these articles have been used to claim that wind and solar don’t drive up prices.

We suspect there’s just one problem: producers don’t pay the costs of goods and services; consumers do.

This would help explain why states with wind and solar mandates see higher prices, but states that simply produce the power might not. Look for more articles on this topic from us in the future.

4. Net Metering is Great for Rich People

As we noted in our article, Stealing with Solar, net metering for rooftop solar installations benefits the wealthy people who can afford the panels at the expense of everyone else. We already knew California was affected by the policy, but the net metering penetration in New England is fascinating and likely a contributing factor to why they have high power prices despite having little wind or solar on their systems.

5. More Load Growth Meant Lower Prices

States with the highest load growth saw the average power price decline in inflation-adjusted dollars. This cuts against the narrative that AI data centers will drive up prices, but it’s not surprising that states that saw demand increases saw falling rates, because the fixed costs of the infrastructure are being spread across more megawatt-hours sold.

However, it won’t be surprising when this phenomenon stops working, either. We’ll likely come back to this in a later EBB article.

6. Distribution and Transmission Spending is Outpacing Generation

Spending on generators has generally fallen in inflation-adjusted terms over the last two decades, which should be the case because of flat load growth during much of that time, while transmission and distribution costs increased.

7. Equipment Costs are Skyrocketing

Adaptation and grid hardening were the largest factors impacting distribution spending, with replacement constituting 28 percent, expansion 28 percent, and other at 7 percent.

For transmission, the largest cost driver, 42 percent, was for expansion, although Brattle did not elaborate on why the system was being expanded, with hardening and replacement accounting for 25 and 28 percent of expenditures, respectively.

Costs were also impacted due in part to the surging cost of equipment. Wires and cables, transformers, and switchgears are all outpacing inflation. It would be interesting to know why these components got so expensive.

Was it due to supply-chain disruptions due to COVID, proposed energy efficiency standards by the Biden Administration that may have chilled investment in transformer capacity, rising demand from data centers and wind and solar projects, or some other factor? Inquiring minds would like to know.

8. Requested Rate Increases Are Skyrocketing

According to data from S&P Global, utilities are asking for massive rate increases from state utility regulators.

We recently subscribed to S&P Global Capital IQ to get access to this data so we can dig deep into this data for ourselves to see where exactly this money is going. The idea is to write more well-researched articles like Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable.

Conclusion

It will be very interesting to see how the study shapes the political narrative heading into the midterms, where climate groups are hoping to turn rising electric bills into a liability for conservative candidates.

In some ways, this study reduces the political potency of that strategy, especially given that distribution and transmission costs, which are unrelated to federal policies, are among the top drivers of higher power prices. Factor in the surging prices of components and maybe the conversation shifts to something more productive, like how can we increase supply to bring prices back down?

All in all this study provided us with some useful information and lots of questions we’d like to answer. See you all next time.

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