Ohio leads eastern states in residential electricity price hikes

Residential electricity prices in Ohio, Pennsylvania, New Jersey, and Virginia have risen 22 to 29 percent since 2005, with Ohio experiencing the largest increase at 29 percent. Higher capacity prices, determined by annual grid operator auctions, are the primary driver of this trend. These payments ensure generators can operate during high-demand summer periods, with a $100 increase in capacity price correlating to roughly 0.3 cents more per kilowatt-hour.

The 2025-26 capacity auction saw a massive price spike, prompting governors across the PJM grid to complain. PJM subsequently instituted a price cap, causing the last three auctions to clear at the ceiling. While data centers are potential contributors to rising costs, insufficient data prevents a conclusive link. Virginia, where prices remain regulated, saw the smallest residential price increases despite significant commercial sales growth.

Virginia's regulated market kept residential prices low even as commercial usage surged 55 percent from 2019 to 2025. In contrast, deregulated states like Ohio saw faster price growth. Researchers note that requiring large facilities to report electricity use will help determine whether data centers are a causal factor in recent price increases.

Read the full story at u.osu.edu.