U.S. wholesale electricity prices will average $45 per megawatt-hour this summer, an 8% decline from last year, the U.S. Energy Information Administration said Tuesday in its monthly Short-Term Energy Outlook. The drop largely reflects lower natural gas costs delivered to power plants, particularly in the western United States. But families shouldn't expect to see savings on their bills — household electric costs are projected to jump 10.5% this summer over last year, and cooling expenses could hit record highs, according to a report from the National Energy Assistance Directors Association and the Center for Energy Poverty and Climate.
The wholesale price decline varies dramatically by region. The Northwest Mid-Columbia hub will see prices drop 46%, from $50 per megawatt-hour last summer to $27 this year, driven by a substantial increase in hydropower. California wholesale prices are forecast to fall 30% to an average of $23 per megawatt-hour, while Southwest prices will drop 27% to $28 per megawatt-hour, both benefiting from relatively low natural gas prices. The Midcontinent Independent System Operator region will see an 18% decline, from $56 per megawatt-hour last summer to $46 this year, thanks to large increases in solar generation alongside growth from natural gas, wind, and nuclear. Meanwhile, PJM and ISO New England prices are forecast to average $69 per megawatt-hour and $64 per megawatt-hour respectively, slightly higher than last summer. Average summer residential electricity bills are expected to reach $792 this year, up from $717 in 2025, and summer cooling costs have increased nearly 40% since 2020.
"I am not expecting consumers to get much of a price savings this summer," NEADA Executive Director Mark Wolfe said, noting that the federal government's energy data arm is "showing no change to their estimates for retail electric prices this summer." The EIA cautioned in its outlook that "heatwaves during the summer could still cause price spikes." Wolfe added that based on EIA and other data, "I am continuing to estimate that this will be a record hot summer and require families to use more electricity to stay cool."
The disconnect between falling wholesale prices and rising household bills reflects extreme heat's impact on electricity demand. The U.S. just emerged from its first major heatwave of the summer, when scorching July temperatures sent prices higher in several markets. PJM Interconnection, the nation's largest electricity market, leaned on demand response to avoid a new load record and saw spot electricity prices jump to $600 per megawatt-hour in Virginia. New England wholesale spot prices leapt 243% and New York City prices doubled during the heat event. Even as lower natural gas costs and increased renewable generation push wholesale prices down in many regions, forecasted extreme heat is eliminating any potential savings for families who must run air conditioning to stay safe.
The findings suggest consumers face a summer of financial strain despite more favorable wholesale market conditions. Cooling costs have climbed sharply since 2020, driven by both higher electricity prices and increasingly extreme weather events requiring more intensive air conditioning use. With experts predicting record-breaking heat and no relief on retail electricity rates, American families will need to budget for significantly higher summer energy bills regardless of what's happening in wholesale markets.