Key takeaways:
- Utilities requested a record $31 billion in rate increases in 2025, more than double 2024, and industrial customers took the steepest price increase of any class.
- Regulators approved 66% of the dollar value of rate requests in 2025, against a 52% average across the prior two decades. And only 2 of 83 requests were rejected outright.
- You have standing to be a party in your utility’s case. Pull your tariff schedule, your demand charge, and 12 months of interval data first.
Your plant’s power bill jumped again this year. Most operations teams book that as weather, fuel, or the grid.
That increase originated in an official filing, which was prepared by a utility, evaluated by a state commission, and contested over many months by a small group of organized stakeholders. Because food manufacturers seldom participate, they’re missing a crucial opportunity. Energy remains one of the few major facility costs established through a formal legal process in which you have the right to take part.
Industrial rates escalated fastest as overall rate hike filings doubled
Electric and gas utilities requested nearly $31 billion in rate increases in 2025, more than double the $15 billion they requested in 2024. Through June of this year they filed for another $18.6 billion, with the second quarter setting a single-quarter record at $9.2 billion, up 26% from Q2 2025.
Industrial customers get no discount on this. Berkeley Lab and Brattle found industrial retail prices rose 6.0% from 2024 to 2025, the largest jump of any customer class, ahead of residential at 5.0% and commercial at 5.2%. Industrial prices are up 27% since 2019.
Capital spending is doing most of the work, not fuel. Investor-owned utility generation spending rose 22% in real terms in 2025 after rising 13% in each of the two prior years, and utilities have $1.4 trillion in capital plans through 2030, 21% above what they planned a year earlier. Every dollar invested expands the rate base, earns a rate of return, and ultimately ends up on a customer’s bill.
Energy costs are determined by state utility commissions rather than a uniform national market. For example, the US industrial average stood at 8.13 cents per kWh in 2024, yet rates varied dramatically across states: industrial facilities in Louisiana paid 5.61 cents per kWh, whereas those in Massachusetts were charged 18.19 cents. Identical equipment can incur triple the electricity expenses simply due to regulatory decisions at the state level.
Rate requests are rarely denied; they’re negotiated down
Regulators don’t reject rate cases. They trim them, and lately they trim less. Berkeley Lab reports that state commissions approved 64% of the dollar value of revenue increase requests over the last five years and 66% in 2025, compared to 52% across the last two decades. In 2025, only 2 of 83 requests were rejected outright.
So while you won’t stop a rate case, you can affect the third or so that still gets negotiated, line by line, by parties who filed testimony and put an expert on the stand. That margin used to be nearly half. It’s getting smaller while the asks get bigger, which is why it’s important to show up now rather than at the next cycle.
Minnesota gave a clean example this spring. Xcel Energy asked for an 8.2% residential gas increase and a 10.65% return on equity. The settlement filed in May cut the increase to 4.1% and the return to 9.55%, with refunds and interest owed to customers who had already paid an interim increase. Participants at the table included the state Department of Commerce, the Citizens Utility Board, and the Suburban Rate Authority, a coalition representing 29 municipalities created specifically for this purpose.
While this specific gas rate case involved residential customers and shouldn’t serve as a precise benchmark for industrial classes, it perfectly illustrates the core strategy. By organizing and securing legal representation, customer coalitions can successfully slice utility rate hikes in half.
The silent battle over customer class allocation
After a regulatory commission establishes a utility’s total revenue requirement, a class cost-of-service study determines how it’s divided among residential, commercial, and industrial users. As the Kansas Corporation Commission explains, ratemaking relies on the principle that “the cost causer should be the cost payer, but other policy and equity factors may also be considered.” That’s the exception where real negotiation happens. NARUC’s desk manual for commissioners describes class revenue distribution as a zero-sum game, where balancing the interests of residential, commercial, and industrial customers proves exceptionally challenging.
Because class allocation is zero-sum, any cost reduction granted to residential ratepayers directly increases your financial burden. With electricity costs escalating by almost 40% from 2021 and three out of four Americans reporting a lack of control over their utility charges, political motives inevitably favor shifting costs toward industrial users.
The structure of your bill is determined by rate design, which typically combines a base customer charge, a kWh energy charge, and a demand charge tied to peak kW or kVA usage. Demand charges often represent the largest cost component for facilities with fluctuating load profiles. Because rate schedules are assigned based on operating parameters that may be outdated, reviewing these assignments can reveal significant cost-saving opportunities.
Four key metrics to look at before filing
- Your rate schedule: Locate the tariff number listed on your utility bill and review the complete rate schedule posted on your utility’s website. Verify that your current operational load still meets the eligibility requirements, as many facilities remain locked into outdated schedules for years.
- Your demand charge as a share of the bill: Analyze a year of utility statements by separating energy use from demand fees. When demand accounts for at least one-third of the overall bill, high peak usage, rather than baseline consumption, is driving your costs.
- 12 months of interval data: By analyzing 12 months of interval data provided by your meter, a load profile will pinpoint the exact operational shifts, production lines, or startup routines establishing your billing peak. Most facilities haven’t analyzed this metric, yet it directly determines the pricing set by your rate schedule.
- Your commission’s open dockets: Search your state commission’s site for your utility. If a general rate case is open, there’s a procedural schedule with an intervention deadline on it.
Securing legal standing and establishing initial contacts
Intervention is a formal step with a low bar for a customer who can show a direct stake.
At the federal level, FERC’s Rule 214 grants standing to anyone with “an interest which may be directly affected by the outcome” as a consumer or customer. State commissions run parallel tests. Minnesota’s asks whether a proceeding “will bind or affect you with respect to a specific interest different from the interest of the public,” and whether “your interests are not adequately represented by the other parties”. For a manufacturing plant dealing with a restructured demand charge, both criteria are easily satisfied.
Being a party gets you discovery, the right to file testimony, cross-examination at the evidentiary hearing, a seat in settlement talks, and appeal rights.
However, there are two key considerations:
- Timeliness is critical: Commissions require parties to intervene promptly on “the reasonably foreseeable issues” raised in a rate filing, and submitting a late petition demands showing good cause.
- Leverage existing coalitions: Food manufacturers are not expected to maintain dedicated regulatory affairs teams. In most states, established industrial customer groups intervene as a collective bloc to distribute legal fees across members. This enables individual plants to secure legal representation that would otherwise be cost-prohibitive. To identify these groups, consult your utility account representative or review the service list on your commission’s recent case dockets.
Why this belongs on the growth agenda
Intervening in utility proceedings presents a rare opportunity to capture recurring margin without having to drive additional sales volume.
For a facility spending $2 million annually on power, utility rate cases routinely adjust electricity costs by single-digit percentages every few years, over and above any adjustments to class cost allocation. Securing even a one percentage point reduction, or transitioning to a rate schedule aligned with your actual load profile, delivers ongoing margin that can directly support capital projects, such as production line upgrades, without requiring customer-facing price hikes.
Conversely, inaction carries a tangible expense. When a customer class fails to advocate for its position, the regulatory burden and cost allocations naturally shift toward the unrepresented parties.
Review your current tariff schedule this week and monitor your state commission’s public docket. If a proceeding is active, intervention timelines are already underway.
