'Something we’ve never seen before:' rising utility rates could strain city finances nationwide

Utility rates in the United States are rising steadily, which panelists on a recent S&P Global webinar warn could have a negative impact on city finances nationwide. "If fewer homebuyers and businesses choose to move to cities where utility rates are high — shrinking the tax base — those cities could have less money to pay for utility infrastructure costs," Vicky Uhland writes for Smart Cities Dive.

Smart Cities Dive reports:

“Data centers, climate change and other factors have caused utility rates in the United States to increase by 38% since 2020, pushing local utility bills into the national spotlight,” said Gabe Grosberg, S&P managing director, North America regulated utilities. That is “something we’ve never seen before,” he said.

While utility rates are high in cities, Sarah Sullivant, S&P sector lead for America's public finance, said sustainable debt for public transportation in underserved communities, along with affordable housing, are "bright spots."