Expect An Energy Bill Spike January 2026

If your energy bill was high in January 2025, prepare yourself for even steeper costs ahead. Based on current market conditions and utility pricing trends, many regions could see winter bills rise by another 30% in January 2026, driven primarily by increases in natural gas prices and higher electricity demand.

Natural gas costs have climbed substantially compared to the 2024–2025 heating season. Benchmark U.S. natural gas prices (Henry Hub) have consistently traded over a dollar higher per MMBtu than the same period last year, via reports from the U.S. Energy Information Administration (EIA). Last winter’s price peak occurred in March, and current market behavior suggests a similar or likely sharper surge could occur again.

Cold weather always influences seasonal pricing, but the magnitude of the increase is notable because utility companies are paying roughly 40% more for natural gas today than they were a year ago. With nearly half of U.S. homes relying on natural gas for heating, and because gas continues to fuel about 40% of U.S. electricity generation, these wholesale increases ripple directly into retail electric and heating bills.

Although natural gas prices historically cycle up and down, long-term structural forces are pushing the floor higher:

The United States is now one of the world’s largest LNG exporters. The International Energy Agency (IEA) projects both global demand and U.S. export capacity to grow further in 2026 and beyond. When American gas producers can sell into a global market where prices are much higher, it shifts pricing power upward domestically.

This dynamic is unfortunately still debated, but the basic economic logic is clear: If a commodity historically sells for $3 domestically and foreign markets are paying $10, producers have every incentive to raise domestic prices toward the global benchmark. US citizens will indirectly compete with overseas buyers.

A few decades ago, a spike in natural gas prices had limited impact on electricity bills. Today, natural gas plants supply the largest share of U.S. electricity.

This means:

• When gas prices rise, electricity prices rise.

• When gas supply tightens, grid reliability declines.

  
  

Electricity is no longer the cheap, abundant resource it once was, and the raw materials needed to generate the electricity is also increasing in cost.

Another major driver of high bills is the stress on America’s aging electrical infrastructure. The North American Electric Reliability Corporation (NERC) and multiple state utility commissions have warned that large regions of the country is struggling to meet the demand.

I believe these three forces are hitting the grid simultaneously:

1. Electrification of everything

No, not just EVs, but everything. We can make fun of the Prius and Teslas another day.

2. Aging infrastructure

Much of the U.S. transmission and distribution system was built decades ago. In states like Michigan, only around 15% of power lines are underground, leaving most of the grid exposed to weather-related outages and inefficiencies.

3. Rapid growth of data centers

AI computing, cloud services, and hyperscale data centers require enormous amounts of electricity. According to recent utility filings, data center growth alone is expected to increase U.S. electricity demand by 10% or more in the next decade, equivalent to adding several major cities’ worth of consumption.

This tightening supply-demand balance increases wholesale electricity prices, which then show up on consumer bills.

The next part of energy policy....

The United States is on a strategic path to expand LNG exports through the late 2020s. This is an economic opportunity, but it also requires extreme caution. The more gas we commit to sending overseas, the more domestic prices become tied to global volatility. This has implications not only for affordability but also for energy security and geopolitical leverage.