What's Happening To Wholesale Electricity Prices?

US wholesale electricity prices have nearly doubled since 2020, rising faster than consumer rates across most regional grid operators. Analysis of location marginal pricing data from 17 trading hubs shows average wholesale costs increased from baseline 2020 levels to peaks 2-4 times higher by 2022, before partially recovering. Consumer electricity prices rose 35% during the same period. Transmission congestion spreads are widening in most Independent System Operators and Regional Transmission Organizations, particularly in PJM, SPP, and NYISO, where bottlenecks increasingly prevent access to cheaper generation. California's CAISO stands alone among major grid operators as wholesale prices remain flat or decline in 2025 despite natural gas volatility. The cheapest wholesale electricity continues to trade in SPP's Oklahoma-Kansas region at $16-17 per megawatt-hour.

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