Affordability: Utility Costs are Indeed Rising
Part One of a Three-Part Series
An overview of why and what you can do.
Utilities make up a proportionately small but critical part of monthly household expenses and include electricity, gas, water, sewer, trash removal, cable and internet. They literally power and enable our daily lives in safety, comfort and connectivity. Utilities provide heating and cooling, lights, resources for cooking, bathing and cleaning, working on laptops and cell phones, entertainment and trash removal. Electricity, cable and internet make up half of total utility expenditures. Money Management International suggests that utilities should be no more than 8 to 10 percent of every household budget. Electricity represents the largest portion (45-55% of utility costs), followed by gas (15-25%), water and sewer (10-20%), and additional services like internet or trash removal, internet and streaming (10-20%).
Utility costs vary widely across the country. According to Move.org, and its 2025 report, the national average for monthly total utility expenditures (including electricity, natural gas, internet, phone, sewer, streaming, trash and water) is $611, up from 2024 costs of $583; a $28 monthly increase. Electricity is consistently the highest expense, while water is typically the lowest. Factors affecting utility rates and costs include size of home, number of people in the home, and whether or not one or more residents occupy the home during long periods of time (for work, illness, leisure, etc.); location and seasonal variations (climate for heating and cooling needs) and daylight hours (lighting); structure of and competition among utility providers (privately owned for profit or community owned not-for-profit, and a wide or narrow portfolio of providers); regulatory oversight; and other policies. Several reports indicate a combination of accelerating and compounding demand, particularly for electricity, and related infrastructure investments will continue to push rates ever higher, most negatively impacting residential consumers.
Michigan’s residential utility costs averaged in 2025 around $482 per month. As a proportion of the state-wide average household income of $6,621.67 per month, utility expenditures make up 7.78% total expenses. Move.org’s scale puts Michigan at 41st out of 50 states, among the lowest cost states. However, Michigan’s residential electricity and gas prices are much higher than the national average, with companies charging some of the highest electricity prices in the country and, with already approved rate hikes starting in 2026, are expected to increase even more in the near and longer-term future if no action is taken to curb escalating costs.
Following, and over the next two days, is a three part overview of the factors contributing to rising costs, along with actions that individuals or households can take in the near-term to help bring utility costs down or at least rise more slowly in the future. In addition, we include some thoughts on what we can do as a community to advocate for policy changes that promote provision of utilities in a more efficient and cost sensible future, as well as help take care of our neighbors who cannot keep up with current, much less rising, costs.
Part 1: Electricity and Gas
As noted, electricity and gas for heating, cooling, water provision (e.g., pumps), lights, etc., make up around half of residential utility costs. According to Bridge Michigan, Michigan has the highest electricity bills among all of the Great Lakes states, averaging $191 per month for residential consumers. Further, Michigan is 18% higher than the national electricity rate average. The Citizens Utility Board of Michigan (CUB of MI), a nonpartisan nonprofit, issued a report in 2025 that concluded Michigan residential consumers pay some of the highest electricity prices in the country while also ranking near the bottom for reliability, with outages that last longer than almost anywhere in the country.
Michigan residential costs are now twice what they were 20 years ago, one of the steepest rate hikes in the country. A recent Detroit News analysis found that average electricity prices in the state have climbed from roughly 10 cents per kilowatt hour in 2006 to more than 20 cents in 2025. Only three states saw larger percentage increases over that period. According to Michigan United, the average electric bill in Michigan is several cents higher per kilowatt hour than in states like Ohio, Illinois, and Indiana. Several factors contribute to these high costs including aging infrastructure, climate change and associated weather extremes, inadequate power loss prevention, and political influence. While these factors are common to other states as well as Michigan, we also have other factors in play that result in higher prices, such as frequency of rate hike requests allowed (annually), inadequate competition, and large providers that are privately owned and have to focus on making shareholders happy.
The US Energy Information Administration reports that 8 of 10 Michigan residents use natural gas as the primary source for heating, consistently placing the state among the top five for its dependency on natural gas. The electric power sector became the largest consumer of natural gas in 2023, surpassing residential use. When increased demand from commercial interests escalates, more infrastructure investment is needed and costs are passed on to not only those increasing the demand in the commercial sector, but also to residential consumers.
Advanced Energy United published an analysis in 2023 finding that Consumers Energy, one of the largest energy providers in the state along with DTE, will charge gas customers more; likely raising bills by 49% by 2030 because of the utility’s own projected pipeline spending. This means the average monthly residential customer bill could increase to $131 by 2030, more than $55 per month higher than 2021 levels on average.
In March of 2025, CUB of Michigan published a study that reinforced United’s finding that costs will continue rising for Consumers Energy customers through 2030. CUB’s report further projects rising costs through 2050 and looks at the state’s other two largest gas utilities’ infrastructure spending. It found that without policy intervention, Michigan gas customers will continue to see their rates rise. Between 2025 and 2050, the study projects a 120% increase in gas delivery charges for DTE gas customers, a 158% increase for Consumers gas customers, and a 106% increase for SEMCO customers. These three companies combined hold around 90% of the electricity and gas market in Michigan.
The Michigan numbers are consistent with trends observed across the country. Between 2022 to 2023 alone, gas capital expenditures surged from $32.7 billion to $49.1 billion nationwide, and those numbers continue to rise, along with rate hikes to consumers.
What you can do individually and as a household:
Monitor and adjust your energy use. For example, turning off lights and lowering your thermostat when no one is inside the home for larger amounts of time.
Consider strategic upgrades like LED lighting (70-90% savings), smart thermostats (10-15% savings), proper insulation (15-20% savings), and heat pump water heaters (60-70% savings) offer significant opportunities to reduce monthly electricity expenses.
Help advocate for policy change (discussed in Part 3 of the series).
In the second part of our series on utility costs, we will focus on streaming, internet and telecom services.
This next installment drops tomorrow, February 4, 2026
Wow, thanks for taking the time to research and share this.
Hope you’ll include info about https://mopupmichigan.org/ in Part 3! If we can get enough signatures to get it on the ballot this fall it could have a great impact on keeping utility costs down