The hidden reason why your power bill is so high
The price of electricity is continuing to rise across the United States, and there’s no end in sight. Why are our electricity bills getting so expensive? Energy prices have been creeping up across the nation for over a decade. The latest consumer price index saw inflation dip below 3 percent for the first time since 2021, but inflation for electricity prices nationwide remains stubbornly high at 4.9 percent.
This stuff is so exasperating. If you're going to write 2,000 words about the high cost of electricity, the first thing you should do is check to see if the cost of electricity is actually high. Here it is over the past decade:
Electricity has grown almost exactly in line with overall inflation and it's grown less than wages. Our electricity bills haven't been getting more expensive.
If you want to write a piece about the cost of electricity, fine. But like so many other reporters, the author of this piece is desperate for a hook, and the hook has to be that electricity costs are drowning us. I'm tempted to say he didn't even bother to check first, but it's worse that that: He cherry picked one month of moderately high electricity inflation (4.9% in July) to make his case, which means he did look at the cost of electricity. And then he decided to go ahead anyway.
This is so goddamn tiresome. If you're going to write a story about X, first check to see if X is true. If it's not, then spike the story. Sorry. I know you want to write it. But you can't. Why is this so hard?
If something has risen in price the same percentage as wages, it means one’s standard of living relative to that something has not increased.
True. But it certainly doesn't mean that the cost of the thing has gone up.
There are huge regional differences in electricity prices so some people probably have seen prices increase more than wages and other people have seen it decrease relative to wages. If it really bothers people and they own their own home and live in the sun belt, they can install solar panels and have fixed price electricity for 25 years. Of course power companies have been moving heaven and PUC's to make that less attractive (NEM3).
And there's a difference between price per kwh and people's bills. This has been one of, if not the, hottest summers--so a lot of air conditioners have been running harder and longer...
Very true -- which means that the explainer from Vox on "the hidden reason your power bill is so high" (their words, not mine) gets it completely wrong.
Additionally, many utilities have been increasing the fixed charge portion of billing (ostensibly to preserve service; more likely, to discourage rooftop solar), and so even if the volumetric price per kwh hasn't changed as much, the overall bill (which is after all what consumers care about) has seen increases.
The economics of electricity generation, transmission, and distribution, are indeed plentifully broken. The 2000 recession (really, in many parts of the country, a depression that has never ended) led, in some places, to a collapse in power demand -- as much as 30%. Since 2000, during Republican administrations, the utility industry has focussed on demanding subsidies to keep coal generation running, and during Democratic administrations, has focussed on demanding subsidies to decommission coal generation before its end-of-design-life. The RTOs don't care: they don't dispatch coal, because it costs more. Now, in some places, there is the data-center boom. If you put a data center where "power is cheap" because demand is still depressed from 2000, then when you turn it on, guess what? All of a sudden, demand is no longer depressed and power is no longer cheap. This causes great confusion for the state-level regulators, who suddenly have to figure out how to mitigate the effects of the data centers stealing power from everyone else, where for the preceding twenty years all they had had to do was open their mouths and let the bribes flow in. Bottom line: here, as mostly, nationally-aggregated statistics are useless. Local differentiation determines local experience.
Some years back a lot of bitcoin "mining" moved to central WA to be near cheap hydro-electric power. The erratic demands were creating a lot of problems, so the regional regulators clamped down and started charging extra fees for sudden demand changes and more scrutiny of new request (with more fees). The fees were not all that large overall, but just enough to make bitcoin mining there unprofitable, and the miners went elsewhere.
And now it's data centers trying the same thing.
PJM just announced a ~7 fold increase in its capacity prices like 2 weeks ago. Going to assume that did not make the chart
Yeah. Part of that is due to PJM's policy change regarding EE measures, but even so, the auction results do not help.
Hopefully it's a one-off that wakes up PJM and gets it to prioritize speeding up the interconnection queue and actually getting new generation physically interconnected such that next year's results are more in line with what we've seen recently.
The brunswick county Duke Power nuclear power plant is exploring the possibility of an 80 year life span. They are currently operating under a 60 year life span. The power plant come online in 1975 which makes it close to 50 years old. While it has operated safely I wonder if pushing the envelope is the right thing to do here?
The plant sits 25 feet above sea level and is 5 miles from the ocean (it is MUCH closer to the Cape Fear River - in fact it is cooled by CF river water) It is one of 108 nuclear power plants that are right on or near, the waters edge world wide.
If the global scientists are right about sea level rise - ALL of those plants would become inoperative in the event of catastrophic warming of the oceans resulting in loss of both Artic and Antarctic ice caps. Sea level rise would raise the level of the lower Cape Fear and render this plant useless MUCH sooner even without a catastrophic rise in temps and/or sea levels.
I am fearful that we would not be able to conduct an orderly shut down and decommissioning should the need arise...........
Then what??????
" ALL of those plants would become inoperative in the event of catastrophic warming of the oceans resulting in loss of both Artic and Antarctic ice caps."
On the plus side, enough sea level rise to flood out power plants that far above sea level and that far from the coast would also destroy the houses and businesses of millions upon millions of utility customers, so demand would decrease by likely more than generation.
So see? No need to worry about CO2 emissions causing climate change! We should be talking instead about the "nuclear warming" thing that Visionary Trump is concerned with.
Here in the DMV the price of electricity has increased 30% in the last two years. The price per kilowatt (purchased and delivered) for our July bill alone was 4.5% higher than our June bill, So I think it depends where one lives.
I assume this is the price per kWh rather than the actual bill paid by consumers? You don't say, though.
Aside from regional variations mentioned above...
What about usage? Over time, people's homes may be using more juice, so the bill may be keeping pace or outpacing inflation/their wages.
"What about usage? Over time, people's homes may be using more juice"
Theoretically, they should be using *less* juice. Appliance standards, EE programs, LEDs, etc. are generally driving down the electricity needs of most households writ large. This is a large part of why overall electricity demand was, up until recently, basically flat for almost 20 years nationwide despite significant population growth and even more significant economic growth.
Individual devices have been getting more efficient, yes, but that's not the entire usage picture.
But people are using more devices than before, in addition to longer, hotter summers.
I haven’t kept up with the details, so take my comments with a grain of salt.
Here in California PG&E is charging a separate cost per kW to deliver electricity. We now get our electricity from a green provider but PG&E tacks on 35 cents a kWH to deliver it. This seems outrageous. Fortunately, I installed a lot of solar power and big battery so we no longer pay anything to PG&E.
You can't make a story out of "everything's fine." You'll get fired.
The average price per kwh of electricity in the US between 2013 and 2023 has been going up at a rate just of over 2.3 percent per year, though in fairness more ot the increase has been in the last 3 years. I guess there's a story in there.
Speak for yourself.
Jun 2018 = 264 kWh / $38.99 -- $0.1477 per kWh
Jun 2024 = 171 kWh / $43.55 -- $0.2547 per kWh
If only inflation were applied, in 2024 it'd be $0.1850 per kWh
Promise me that you will not get tired of doing these types of posts, Kevin. It is astonishing that the WSJ, supposedly the preeminent mass-distribution finance publication in the country, continuously and routinely makes these rookie level mistakes (and that is actually being too kind). The only short-coming going forward would be if you don't start naming names - who is the utterly incompetent, if not deliberately deceitful, reporter whose name is on the byline. And keep naming them. Maybe one day they will learn the concept of shame.
Insisting that electricity isnt actually more expensive because other things are also more expensive isnt really a compelling argument. Even worse is the argument that electricity isnt actually more expensive if you compare it to 2010-14 and ignore every year since then.
Both fall a bit flat.....