EIA Projects Rising Electricity Prices, Widening the Gap with Natural Gas to 4.0x in 2027
Comparing natural gas and electricity on a delivered-energy basis, by converting both to a common unit (MMBtu), highlights why direct-use natural gas remains important for households and businesses, especially for space heating and other on-site end uses. In 2024, the U.S. average residential price for natural gas was $14.00/MMBtu, compared with $48.30/MMBtu for electricity, electricity being 3.5 times higher. The Energy Information Administration (EIA) projects that the price gap will widen further, with electricity prices reaching 4.0x the price of natural gas by 2027. These projections highlight the policy value of gas utility service for direct-use appliances in supporting affordability.
Key Findings
- EIA’s Short-Term Energy Outlook (STEO) updates monthly projections of end-use residential prices for natural gas and electricity through 2027. On a delivered-energy basis, 2024 average residential prices were $14.00/MMBtu for natural gas and $48.30/MMBtu for electricity, a 3.5x ratio. EIA projects the electric-to-gas ratio rising to 4.0x by 2027, driven by rising electricity prices and flat or declining natural gas prices. In 2027, natural gas is projected to be $13.68/MMBtu (about 1% below 2024) while electricity is projected to be $54.07/MMBtu (about 14% above 2024).
- All Census regions except the Mountain region show a widening electricity-to-gas price gap. STEO does not publish state-level price projections, but if the trend continues, states could generally move in the same direction on average. The Northeast shows the widest gap between electricity and natural gas prices, with the regional average ratio projected to reach 4.5x in 2027. Several states (e.g., PA, NY, NJ, CT) already show similar ratios in 2024.
- Southern states generally have lower electricity-to-gas price ratios than most northern states, although some are still near 3x in 2024 (e.g., KY, TN, OK). Even so, EIA projects the South’s ratio to widen the most among major Census regions, increasing about 14% by 2027 as electricity prices rise relative to natural gas.
Reported State Energy Prices and Regional Projections
Source: EIA Short Term Energy Outlook, March 10, 2026 // AGA Contact: Brendan O’Brien (bobrien@aga.org) 202-824-7220
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