Electricity bills could hit your pocketbook even more this summer
Electricity bills could hit your pocketbook even more this summer
One of the many components of the CPI report out on Wednesday: the cost of electricity for American households. It was up nine-tenths of one percent month-to-month, up 5% year-on-year.
And we got another number on Monday that indicates electricity bills might be an extra financial burden for households in the months ahead: the Energy Information Association expects electricity demand to rise by 4% this summer, anticipating that it’ll be even hotter than last year. Using more electricity in the hot months will hit some American pocketbooks more than others.
A lot of people will probably crank their ACs to cope with the heat, says the EIA. But the price of the electricity to run them may actually go down a bit this year. Seth Feaster with the Institute for Energy Economics and Financial Analysis points to two reasons.
“Natural gas prices and increased solar generation,” he said.
Natural gas has gotten a lot cheaper, and solar installations are up, Feaster says. But we could still face higher energy bills if we have to use more electricity. Feaster has an analogy: “If we have a hot summer and you buy more beer, you will be spending more money on beer, but it doesn’t mean the price of beer itself, which is the inflation factor, is actually rising. The same is true with electricity.”
But air conditioning during a heat wave is kind of more essential than buying a six-pack.
And if hotter temperatures mean running that AC more, that will especially impact households considered “energy insecure.”
“Black and Hispanic households will be disproportionately impacted by an increase in energy prices, those with young children and often low-income tenants as well,” said Michelle Graff, a professor at Cleveland State University.
Graff says higher energy bills can often lead people to coping strategies.
“From not turning their air conditioning low enough to actually achieve a comfort level, to actually foregoing other necessities like food or medicine,” she said.
There are assistance programs out there to help pay electricity bills and to improve energy efficiency, which is often expensive up front.
Rebecca Foster heads the efficiency non-profit VEIC, which offers a voucher to low- and moderate-income households.
“And they can use that voucher to upgrade an air conditioner or another major appliance with a more efficient model,” said Foster.
Which can save money in the long run.
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