How utilities set electric rates: rate cases in plain words

The idea in plain words

A regulated utility is paid by its customers' rates. The commission decides how much money the company may collect and how to split it among homes, shops and factories. EIA says electricity prices generally reflect the cost to build, pay for, maintain and operate power plants and the grid, and that some for-profit utilities also include a return for owners and shareholders.

EIA also says the cost of generating electricity is the largest component of the price. So a rate case is only one part of a bill. Fuel costs and wholesale power costs move too, and in some states they pass through to the bill by a separate line.

The steps, from a state commission's own guide

We use the South Dakota Public Utilities Commission's information guide to electric rate increase requests, which we downloaded on 2 October 2026. It is one state's process. Others differ in time limits and names. The steps below are South Dakota's.

1. The utility files. It states the proposed increase for each customer class (residential, commercial and industrial, for example) and the reason. 2. The clock runs. The guide says: "The PUC has six months to investigate and make a decision about a rate request before the utility may put interim rates into effect, subject to refund". 3. Staff dig in. Staff on a case typically include one attorney and several analysts, who examine items such as operating expenses, employee benefits, executive compensation, corporate advertising and the cost of generation and transmission facilities. 4. The public can join. People can read the docket, send written comments, or apply to be an intervenor, a formal party in the case. 5. The commission decides. It may "approve, deny or approve with modifications the proposed rate increase". The decision can be appealed to the circuit court.

South Dakota's guide gives the test the commission weighs: the public's need for adequate, efficient and reasonable service against the utility's need to collect enough revenue to cover its costs and "the opportunity to earn a fair and reasonable return". It gives a sample docket name: EL26-003 means electric, filed in 2026, third electric docket of that year.

Who is outside the process

The same guide says the South Dakota PUC has six investor-owned electric utilities under its ratemaking authority and "does not have ratemaking authority over electric cooperatives or municipal electric organizations". Co-op boards are elected by members. City-owned utilities are run by local government, which sets their rates. Other states draw the line elsewhere, and we did not read each state's law, so do not assume South Dakota's line applies to yours.

The ownership counts below show why that matters. Investor-owned utilities are only 144 of the 1,298 utilities in the EIA-861 2024 file, but they serve 68% of home accounts. There are 548 cooperatives and 455 municipal utilities, which together serve 23% of home accounts.

Source: EIA-861 2024, utility data by ownership type as reported; each utility counted once, home accounts as reported (a utility in two states is counted once); behind-the-meter reporters left out. Retrieved 2026-10-02. CSV, 7 rows.

What the commission says it does

EIA says that in some states public service commissions fully regulate prices, and other states combine unregulated prices for generators with regulated prices for transmission and distribution. In the second group, the wires part has regulated prices and the generation part has unregulated prices. That is the case in states with supplier choice; see TDU vs REP and how electricity deregulation works.

What happened to prices

The chart shows the national home price: 11.54 cents in 2010, 12.65 in 2015, 13.15 in 2020 and 17.30 in 2025. We cannot say how much of that came from rate cases. Fuel, wholesale power, storms, new wires and demand all moved. The state table below lists each state's two end points and the share of home accounts with investor-owned utilities, which is a rough guide to how much of a state's bill goes through a commission-approved rate. Other states may treat co-ops and cities differently, so the share is a hint, not a rule.

Across 50 states and DC, the share of home accounts with investor-owned utilities runs from 0% in Nebraska to 100% in West Virginia. Prices rose 92% in California and 3% in Nevada over the ten years, nominal.

Source: EIA-861 2024 (ownership by primary state of each utility); EIA retail sales, 2025 and 2015 annual; commission pages from our 2 October 2026 check, shown only where the page answered with HTTP 200. Nominal prices: no inflation adjustment. CSV, 50 rows.

How to follow a rate case in your state

Start with your commission. In our 2 October 2026 check, 14 state commissions had a rate case page that answered with HTTP 200; the table links them. For the rest, search the commission's site for the docket list, or open your state's help page (for example Texas) for the commission link. Our commissions and rate cases page lists every commission we checked.

Find the utility's name, the docket number, the filing date and the proposed change by customer class. Then look for the comment deadline. We have no data on rate case outcomes by state or on how many cases are open now: no data.

What this page cannot tell you

We did not read the rate case law of the 50 states. We cannot say how long your state's process takes, how much utilities ask for or how much they get. Rates can also change outside a rate case through riders and fuel adjustments; our bill line guide explains those lines. Read the primary sources linked below for rules that apply to you.

Key facts and where they come from

CSV, 13 rows.

Keep reading

• Why electricity prices differ by state
• How to read your electric bill
• Fastest rising electricity prices
• Cheapest electricity by state
• State utility commissions and rate cases
• Data sources