Natalia Chi
nevertheless Inflation is cooling steadily Electricity prices have continued to rise since peaking in June last year.
Standard electricity bills this summer are expected to rise by about 2% compared to a year ago. according to to the Energy Information Agency. Why: Although wholesale electricity costs have declined, there is generally a lag before such a decline is reflected in residents’ monthly electricity bills.
“Wholesale electricity prices have fallen significantly by 2023, but it may not be until later this year or 2024 that those cost reductions are reflected in retail prices,” the EIA wrote.
Most (about 40%) of U.S. electricity is produced by burning natural gas, the cost of which rose to a 14-year high last fall before falling in early 2023.
“Many utilities are buying natural gas in the fall and trying to spread it out over time so consumers don’t get hit with high bills right away,” said executive director of the National Association of Energy Assistance Directors. says Mark Wolfe. .
“If you’re a consumer, it’s a little confusing,” he says. “Consumers look at gas and say, gas is going down, why am I still paying more for utilities and electricity?”
Most utilities also have to ask regulators to approve price increases, which is another reason price changes have been slow. And besides fuel prices, utility bills for labor and maintenance are still rising.
“Utilities are rebuilding the grid, but that’s going to be expensive,” Wolff said. “Roughly half of the cost of electricity that consumers buy is wire charges, so just because the cost of natural gas fuel has gone down doesn’t mean it’s a one-to-one relationship.”
Electricity costs vary from country to country, with New England’s average electricity cost twice that of the cheapest region, Mountain West. The EIA projects that a typical monthly bill for New England residents this summer will be about $180, $14 higher than last year.
“The New England power market has experienced record cold weather Last winter, combined with the limited capacity of natural gas pipelines, added upward pressure on natural gas prices, which ultimately impacted electricity prices in the region,” EIA said.
In contrast, monthly bills in the Southeast are projected to drop slightly, to about $187, $8 less than last year. This is because EIA expects the region to have cooler summers, which will reduce the use of air conditioners.
Such forecasts require caution. Weather adds considerable uncertainty. “If temperatures are much higher than expected, household electricity bills are likely to rise, especially in southern states,” the agency said.
