Thanks to cheap natural gas, electricity prices have been a relatively stable part of Americans’ budgets for many years. But this year’s rise in commodity prices could lead to a rude awakening for consumers and a moment of contemplation for policymakers.
Consumers have spent Extra 16% on utility payments in August compared with a year earlier, according to Bank of America. The US Energy Information Administration said last week it expected Retail price of electricity increased by 7.5% this year. That would be the biggest percentage increase since 2006, when prices rose 10.4% in tandem with rising natural gas prices – this time also the culprit. The price of natural gas, which accounts for 38% of U.S. electricity production, has more than doubled so far this year.