Are Electricity Rates the New Gas Pump Prices?

Find customized solutions to rising energy costs

For many decades, electricity rates have been something an afterthought for most Americans. Compared to the near-constant stress of mortgages, gas prices, and car payments, electricity rates basked in stability - they weren’t nothing, but they didn’t present the same level of monthly uncertainty. 

Seemingly overnight, this era has ended. In 2024 and 2025, American households and businesses noticed an unsettling trend in their utility rates. It wasn’t in their imaginations - average commercial electricity rates rose by an average of over 6% in 2025, with the biggest jumps occurring in regions like Texas and the Mid-Atlantic. These increases are leading to surges in overhead costs for businesses, most of whom are still reeling from pandemic-era inflation and tariff-induced economic uncertainty. 

On the surface, the explanation for this newfound volatility in electricity rates is simple. The nation is using significantly more electricity than it was before, leading to a constrained supply. While AI data centers are the poster child for this uptick in demand, there is also something to be said for electric vehicles, electrified home goods, and more. Whatever the reason, commercial and residential electricity rates are rapidly becoming a contentious political “kitchen table” issue - just like gasoline prices have been since the early 1970s.

Interested in reading more about where utilities are rising and why? Make sure to sign up for our newsletter here.

Fortunately for consumers in deregulated electricity markets, the market offers opportunities in addition to challenges. As prices fluctuate, the companies that deliver electricity to consumers compete with each other to offer the best utility rates. These companies are classified differently according to the region they operate in. For example, providers in Texas such as Constellation, NRG, TXU and hundreds more are known as REPs (retail energy providers). In other states the acronyms for third party electric vendors are EGSs, ESCOs, ARES, CRES, etc. 

Businesses that seek assistance from an energy broker can utilize energy procurement services to find the best rate for their energy needs in a rapidly changing economy. Some consumer rates are calculated according to an indexed pricing plan, which are based on the fluctuating wholesale rate plus energy providers’ service charges. Many businesses stand to save money by negotiating an indexed plan that is customized to their electricity consumption.

As an alternative to index plans, an energy consultant can help consumers with energy savings by locking in a fixed price plan. As the name implies, this highly advantageous setup locks in a preferred commercial electricity rate that leaves the consumer protected from price volatility and unpredictable spikes in energy costs during hours of peak demand. Just like a fixed-rate mortgage! 

Energy procurement services can save consumers between 5-15% in energy cost reductions. Contact Red Shield Consulting to set up a phone call about energy contract negotiation, fixed price plans, and other opportunities for how to reduce business electricity costs.