Natural gas prices are soaring and the price of electricity along with it. How much more are you paying?
CPI data from the BLS via St. Louis Fed, chart by Mish
Electric Rates in Texas Have Surged Over 70% as Summer Kicks In
On June 2, the Dallas Morning News reported ‘We’re in trouble’: Electric Rates in Texas Have Surged Over 70% as Summer Kicks In
The price of natural gas has increased even more than crude oil, but many consumers may not have noticed. They will soon enough — in higher electric bills.
How much higher? Over 70% higher than a year ago for residential customers in Texas’ competitive market, according to the latest rate plans offered on the state’s Power to Choose website.
This month, the average residential rate listed on the site was 18.48 cents per kilowatt hour. That’s up from 10.5 cents in June 2021, according to data provided by the Association of Electric Companies of Texas.
For a family using 1,000 kWh of electricity a month, that translates into a monthly increase of roughly $80. Over a full year, that would sap nearly $1,000 extra from the family budget.
“We’ve never seen prices this high,” said Tim Morstad, associate state director for AARP Texas. “There’s going to be some real sticker shock here.”
My chart shows major metro areas with monthly posting current through July.
The average US household pays a whopping 47.3 percent more for electricity than a year ago.
Texas is deregulated, most states aren't . But utilities, even when regulated, can and do petition for rate hikes when their costs go up.
The percentage is important, but so is the starting point.
CPI Electricity Index Level
CPI data from the BLS via St. Louis Fed, chart by Mish
As miserable as many cities looks, San Francisco is in a class by itself.
Cost Per Kilowatt-hour
Electricity price data from the BLS via St. Louis Fed, chart by Mish
Note that the key consumer cost is not just the price per kilowatt-hour but how much electricity one uses.
Cities with hotter summers will use a lot more electricity for air conditioning than cities high in the mountains.
US Natural Gas Price Near 14-Year Peak, EU Hits New Record
US Natural Gas Futures courtesy of Trading Economics
Earlier today I reported US Natural Gas Price Near 14-Year Peak, EU Hits New Record
The price of natural gas has been climbing for most of the month. This will translate to higher electrical costs in the CPI report for August.
How bad the electrical component feels will vary widely city by city.
Given the price of gasoline has mostly stabilized for August, but electricity hasn't and rent likely hasn't, don't expect another "no inflation" reading in the next CPI report.
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