New analysis shows more US consumers are falling behind on their utility bills
More Americans are slipping behind on electricity and natural gas payments, signaling mounting financial strain for households and complicating the political narrative around inflation and affordability. A new analysis by The Century Foundation finds that past-due balances to utility companies rose 9.7% year over year between the April–June quarters of 2024 and 2025, reaching an average of $789. Over the same period, monthly energy bills climbed 12%.
What the data show
The Century Foundation’s review, based on the University of California Consumer Credit Panel, suggests that families are finding it harder to keep up with core expenses. Because utility bills are typically prioritized alongside mortgages and auto loans, a rise in utility delinquencies can indicate broader financial pressure. The analysis estimates that nearly 6 million households carry utility debt so severe that it is likely to be sent to collections soon.
The report also notes a 3.8% increase in the number of households with severely overdue utility bills during the first six months of President Donald Trump’s current term, underscoring how quickly stresses have built for some consumers. Advocates warn that when essential bills pile up, families often face cascading challenges across other obligations, from rent and car payments to credit card balances.
Energy demand, AI growth, and rising bills
The surge in utility delinquencies intersects with a larger economic and policy tension. The administration has highlighted the rapid expansion of artificial intelligence as a pillar of future growth. Yet AI data centers consume vast amounts of electricity, contributing to rising demand that can put upward pressure on power prices. For households already stretched thin, higher utility costs amplify affordability concerns.
These pressures come as many voters cite the cost of living as a top issue. While gasoline prices often draw the most public attention, electricity and natural gas carry slightly more weight in the consumer price index. That means any savings at the pump may be offset by steeper monthly utility bills, particularly in regions experiencing rate hikes or high summer cooling and winter heating needs.
Political stakes and policy arguments
Affordability has become a central political battleground. The president has argued that inflation figures are misleading and has claimed that energy costs are falling overall. Administration officials have also said that electricity prices are largely determined at the state level, emphasizing that state utility commissions, not the federal government, set rates. They contend that states leaning more heavily on certain energy sources see different cost trajectories.
The Century Foundation counters that federal actions can still influence long-term price dynamics, arguing that hindrances to the growth of renewable energy—such as wind and solar—can sustain or increase power costs. Consumer advocates add that families feel the impact acutely when utilities seek rate increases to fund infrastructure and meet rising demand, including from data center expansion.
How families are coping
When utility balances fall into arrears, households face difficult trade-offs. Some turn down thermostats or delay other essential spending to stay current; others juggle bills, risking late fees and potential service shutoffs. Community groups report that emergency assistance programs can be strained during periods of unusually high bills, leaving vulnerable families with limited options.
If past-due accounts are sent to collections, the consequences can extend beyond the immediate power bill. Collections can damage credit scores, making future borrowing more expensive and complicating access to housing or car loans. That feedback loop can deepen financial instability even after a family catches up on utility payments.
The broader consumer picture
Despite the clear warning signs in utility data, other indicators show a mixed picture. The New York Federal Reserve reports that delinquency rates 90 days or more past due have risen over the last year for mortgages, auto loans, and student debt, though mortgage delinquencies remain relatively low by historical standards. Meanwhile, an analysis of debit and credit card spending by the Bank of America Institute suggests that, on average, household finances still look generally stable, even as pockets of stress grow.
Whether the recent spike in utility delinquencies proves to be a temporary pressure or the start of a more persistent trend will depend on several factors: the path of energy prices, the pace of data center-driven electricity demand, the trajectory of wages and employment, and any policy responses at both the state and federal levels. For now, the rise in overdue balances serves as a fresh reminder that essential household costs remain a pain point for millions of Americans.
