Why Do Cities Continue To Accept Rising Utility Prices?

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Why were US utility prices so high in Q1 2026? Is it a recent phenonemon, or is it a result of long-established trends? You’d think that natural gas itself would be the cause of rising costs, right?

You would’ve been correct years ago, but there’s a set of more recent causes that are making it difficult to rein in rising utility costs.

Gas utility spending on distribution infrastructure has more than tripled since 2010, and customers would have saved $130 billion ($1,723 per gas household) if utilities had maintained pre-2010 levels of investment instead of dramatically accelerating spending. “The sleeper culprit of these continuously rising bills is, in fact, the infrastructure,” Kristin Bagdanov, co-author of a new report by the Building Decarbonization Coalition (BDC), told Inside Climate News.

The US gas system is increasingly expensive, aging, and inefficient—and, over the last decade, gas utility spending has shifted from business-as-usual investment to an era of accelerated capital expansion.

Continued investments in the gas system don’t make sense.

States with mandated climate goals will have to invest in electrification and dramatically reduce fossil fuel use. Bagdanov and BDC report co-author Kevin Carbonnier argue that it is time to manage the transition from the gas system to clean thermal infrastructure, including electrification and thermal energy networks.

“Let’s look at non-pipe alternatives to see if we can modernize our homes and our infrastructure, rather than putting in the millions of dollars to replace that pipe,” Carbonnier explains.

Bagdanov and Carbonnier point to three trends that stand out.

1. Heat pumps continue to maintain majority market share.
2. Gas utility spending and gas bills keep rising.
3. States are pushing back on gas system growth.

Heat pumps outsold gas furnaces for the fourth year in a row, and they outsold air conditioners for the first time ever. Yet, even as heat pumps and other clean electric technologies gain ground, many households are still paying into a gas system that is getting more expensive every year.

The Problems with Gas Infrastructure

• The gas system infrastructure, like pipeline replacements, accounted for about 70% of customer bills in 2024, while gas was just 30%.
• Each year of accelerated gas utility spending adds at least $40 billion in excess lifetime costs for ratepayers.
• About two-thirds of a typical household’s gas bill now goes to delivery and infrastructure, rather than the gas itself.
• In 2025, gas bills rose 60% faster than electric bills and four times faster than the rate of inflation.
• One in four households reported forgoing food or medicine to pay for energy bills in 2024.
• In 2025, gas utility bills rose 60% faster than electric ones and four times faster than inflation.
• In the last decade, gas utility spending on pipes and delivery tripled, reaching $28 billion in 2023.

Utility spending has far outpaced growth in the gas customer base, which is up just 8.5% in total since 2000. “That means people are paying more per pipe than they had been 30 years ago,” Bagdanov said, creating a gas system that is “underutilized and more expensive.”

Regulators in a growing number of states are beginning to respond to these rising utility prices by scrutinizing new gas spending and evaluating the clean energy alternatives that could avoid it. Geothermal energy networks, demand-response programs to use energy more efficiently, sewer heat recovery, and electrification are all options that municipalities can use to move away from rising gas utility prices, the BDC report outlines.

Unpacking the Problems with Gas Infrastructure

CleanTechnica’s Michael Barnard helps us understand why some of the gas infrastructure on which so many people have depended for years is now problematic.

Gas turbines face extended delivery times, often ranging from five to seven years due to global manufacturing backlogs. The primary driver of these delays is a combination of limited manufacturing capacity, aging production infrastructure, and supply chain disruptions still lingering from the COVID-19 pandemic and geopolitical tensions.

By contrast, large-scale solar installations and substantial battery storage facilities regularly come online in under two years. Better, more sustainable alternatives become available to current utility services, and that means that a once-robust pool of customers slowly migrates away. As electrification accelerates, customers begin leaving the gas system, typically starting with newer buildings and higher income households that can afford to switch.

The infrastructure remains largely unchanged. A gas main serving a neighborhood must still be inspected, repaired, and operated even if half the homes disconnect. If a utility has 1 million customers supporting $20 billion in distribution assets, Barnard continues, that represents about $20,000 of infrastructure per customer. If electrification reduces the customer base to 700,000 while the pipe network remains mostly intact, the same $20 billion must now be recovered from fewer people, raising the effective burden to nearly $29,000 per customer.

Profits fall, but existing customers still need service — and don’t pay enough to maintain the entire network of linear assets.

As their revenues drop while their expenses remain the same, utility companies can increase rates to their remaining customers without those remaining customers having any recourse. For the bottom 40% of the socioeconomic ladder, that means that they get squeezed between capital costs for switching to better choices that they can’t afford and monthly utility bills that they can’t afford.

Final Thoughts

While US consumers are grappling with soaring costs, the Sierra Club says that utility companies are planning to add nearly 500 more expensive and polluting gas-fired power plants across the country. Over the past year, electricity prices increased at double the rate of inflation. Rather than investing in more wind and solar power—the cheapest forms of energy—utility companies are planning to increase currently online gas power plant capacity by nearly 50% nationwide.

Although new gas power plants are still in the works, many municipalities are acquiescing to the fact that renewable energy plus energy storage is a more flexible, timely, and affordable answer to the rapid rise in electricity demand.

For example, although natural gas generation still provides more electricity than any other source in California, electricity generation from natural gas has decreased over the past several years while generation from solar has increased. Electricity generation from January through August 2025 was 140.9 billion kilowatthours (BkWh), 8% more than the same period in 2020.

Meanwhile, expansion of gas infrastructure continues. On March 30, Mountain Valley Pipeline announced it had begun construction in Virginia on its Southgate project, a31-mile natural gas pipeline extension. It will reportedly be able to deliver 550 million cubic feet per day from the main pipeline to Dominion Energy’s distribution facilities in North Carolina.

Resources

• “Harnessing the power of coalition for an all-electric future.” Building Decarbonization Coalition. 2026.
• “Momentum Q1 | 2026.” Kristin George Bagdanov and Kevin Carbonnier. Building Decarbonization Coalition.
• “The hidden culprit behind rising gas utility bills.” Carrie Klein. Inside Climate News. April 7, 2026.