You may have noticed you’re finally starting to pay less for things like gasoline and eggs, but despite an overall decline in inflation rates the cost of electricity remains elevated.
The price of residential electricity spiked more than 10% in 2022, and the U.S. Energy Information Administration expects prices to continue their upward march, increasing another 3.5 percent through next year.
Increases Might Be Higher Due to Location
Increases are even higher in certain parts of the country. Electricity prices in New Hampshire are growing the fastest, rising 40% from August 2021 to August 2022, according to a Payless Power study. That study also found that more than three-quarters of Americans were concerned about affording their utility bills and more than half said they were eating out less to save money. And 35% of small- and medium-business owners said the cost of electricity has made them more likely to institute a work-from-home policy.
[Related:10 Ways to Save Energy and Lower Utility Bills]
Factors That Boost Electricity Bills
There are several factors pushing — and keeping — electricity prices higher. The largest driver may be a decrease in the domestic supply of natural gas, which generates 40% of the nation’s electricity. That’s due to an increase in exports of natural gas to Western Europe, which had imported it primarily from Russia prior to the war in Ukraine.
Mark Wolfe, executive director of the National Energy Assistance Directors Association, which represents the state officials that administer the federal low-income energy assistance program says, “The U.S. is now the largest global exporter of natural gas on planet earth, and the result is that markets are tighter here and the cost is more volatile.”
Closer to home, overall inflation and higher labor and supply costs have increased utility providers’ operational costs.
“There are a lot of different factors that will affect the cost of electricity this summer, and many of them are completely outside of the control of the consumers,” Wolfe says. “But what you can control is how much energy you use.”
[SEE: 10 States That Produce the Most Renewable Energy]
Some Strategies to Cut Energy Use
Here are some easy ways to dial down how much energy you use:
— Install a smart thermostat. This is the easiest way to make sure that you’re not using too much heat or air conditioning during times when no one is home or your family is sleeping.
— Seal up air leaks. This is an easy DIY project you can accomplish with supplies from your local hardware store. “Replace caulking or weatherstripping to your home maintenance to-do list,” Courtney Klosterman, home insights expert at Hippo Insurance, says. “People often overlook the leaks or drafts that come through doors and windows.”
— Upgrade to more efficient appliances and systems. This may require you to spend a bit more upfront but the savings from energy-efficient refrigerators, dryers and HVAC units can pay for themselves over time. That means that if it’s time to replace a unit anyway, opting for the eco-friendly version may be a smart investment. An added bonus: You may qualify for a rebate or tax credit for such a purchase under the Inflation Reduction Act.
— Switch to time-of-use billing. Some energy providers offer lower rates for electricity users who use their energy during off-peak times, such as late at night or in the middle of the day. Opting in to “time of use” billing could save you money if you’re able to shift your timing of high-energy activities like cooking or running the washing machine.
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High Electricity Bills Likely Won’t Come Down This Year originally appeared on usnews.com
