Dec 14, 2011

The Low-Down: Household Electricity Bills Skyrocket

Surveys regularly ask people to rank the the most transformational inventions. Computers, telephones and autos usually top the list. One that does not often appear, but that may be of 'stealth' signficance is central air conditioning.


The reason is that it has changed migration and mobility patterns in the US - primarily from north to south - which, in turn, has affected political trends. It has also impacted electricity bills, which are consuming a greater percentage of Americans' after tax income than at any time in the past 15 years. 

Dennis Cauchon reports in USA Today:

Electric bills have skyrocketed in the last five years, a sharp reversal from a quarter-century when Americans enjoyed stable power bills even as they used more electricity.

Households paid a record $1,419 on average for electricity in 2010, the fifth consecutive yearly increase above the inflation rate, a USA TODAY analysis of government data found. The jump has added about $300 a year to what households pay for electricity. That's the largest sustained increase since a run-up in electricity prices during the 1970s.
Electricty is consuming a greater share of Americans' after-tax income than at any time since 1996 — about $1.50 of every $100 in income at a time when income growth has stagnated, a USA TODAY analysis of Bureau of Economic Analysis data found.

....Prices are climbing, too, hitting a record 11.8 cents per residential kilowatt hour so far this year, reports the Energy Information Administration. The increase reflects higher fuel prices and the expense of replacing old power plants, including heavily polluting — but cheap to operate — coal plants that don't meet federal clean air requirements.

"Higher bills are a huge problem for low income families," says Chris Estes, executive director of the North Carolina Housing Coalition, which opposes a proposed rate hike in its state by Duke Energy. "Utilities are what people's budgets start with."