Electricity bills are soaring across the country as winter approaches

Electricity bills are soaring across the country as winter approaches
Electricity bills are soaring across the country as winter approaches

U.S. utility customers, facing some of their biggest bills in years, are expected to pay even more this winter as natural gas prices continue to climb.

Natural gas prices have more than doubled this year due to a global supply shortage exacerbated by war in Ukraine, and are expected to remain high for months as fuel is needed to light and heat homes during the winter. ‘winter. The shortage of supply has made it much more expensive for utilities to purchase or generate electricity, and these costs are passed on to customers.

From New Hampshire to Louisiana, customer electricity rates are rising. The Energy Information Administration forecasts residential electricity prices to average 14.8 cents per kilowatt-hour in 2022, up 7.5% from 2021. The agency predicts record gas consumption this year amid soaring prices, in part because power generators are limited in their ability to burn coal instead due to supply constraints and plant closures.

A liquefied natural gas vessel was waiting to be loaded at a facility in Louisiana this spring.

Photo:
Mark Felix/Bloomberg News

Electricity prices have risen in many parts of the country alongside natural gas prices, with exporters shipping record amounts of fuel overseas due to supply shortages in Europe, which is struggling to reduce its dependence on Russian supplies. Natural gas producers, crippled by pipeline constraints and investors pushing for austerity, have not increased production enough to ease the pressure.

The U.S. electricity consumer price index in August jumped 15.8% from the same month a year ago, the biggest such 12-month increase since 1981, according to a report by the US Bureau of Labor Statistics.

The strain is particularly acute in New England. The region is investing heavily in renewable energy sources, but many of these projects are not yet operational and it still relies heavily on natural gas for electricity generation. The region has limited pipeline capacity and imports large volumes of liquefied natural gas, the supply of which is shorter due to European demand.


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Eversource Energy,

a utility company that serves about four million electricity and natural gas customers in Connecticut, Massachusetts and New Hampshire, last month implemented an unprecedented price increase for New Hampshire customers. Rates have more than doubled from about 10.67 cents to 22.57 cents per kilowatt hour and will remain at that level through January.

James Daly, Eversource’s vice president of energy supply, said rate increases appear to be particularly steep in New Hampshire, as regulations require the company to contract supplies less frequently than in other states. where price increases are therefore more gradual. He said wholesale electricity prices have roughly tripled since 2020, reaching $130 per megawatt-hour during peak periods.

“We are still seeing the effects of the war in Ukraine on liquefied natural gas prices, and that is affecting our winter supply situation,” he said.

Donald Kreis, who works on behalf of utility customers through the New Hampshire Office of the Consumer Advocate, said his office has recently seen a sharp increase in calls from customers concerned about their ability to manage soaring electricity prices. Delivery costs for natural gas and fuel oil have also increased, making home heating more expensive as it gets colder.

In Louisiana, rising fuel costs are on top of recovery fees charged by utilities to pay for damage caused by a relentless series of storms.

Photo:
Gerald Herbert/Associated Press

“People are really freaking out because winter is coming,” he said.

The National Energy Assistance Directors Association has predicted the highest winter heating season in a decade — a 35% jump to an average of $1,202 from two seasons ago — and a likely shock to consumers.

“For families with limited discretionary income, this is a very significant burden because we’ve had a long period of very affordable home energy,” said Mark Wolfe, group chief executive, which represents directors. state of the federal assistance program for low-income people behind on energy bills. About one in six American families are already behind on utility bills, NEADA estimates.

duke energy Corp.

, a North Carolina-based utility company that provides electricity and natural gas to parts of seven states, strives to manage gas price volatility through hedging strategies. The company recently warned residential customers in Florida, where regulations limit coverage, to expect bills to rise an average of 13% starting in January.

Electricity bills in the United States have skyrocketed and are expected to rise as households smash their air conditioners. The WSJ’s Katherine Blunt explains why electricity and natural gas prices have risen so much this year and offers advice on how to manage expenses. Illustration: Mike Cheslik

“The spot prices we’re seeing for natural gas are very scary,” said Nelson Peeler, Duke’s senior vice president for powertrain and fuels strategy. He added that fuel costs can account for at least 30% of a monthly bill with such high prices.

In Louisiana, where power generation is heavily geared towards natural gas, rising fuel costs add to recovery fees charged by utilities to pay for damages caused by a relentless series of storms that have battered the ‘State. Particularly hot June and July meant people were using more air conditioning than usual.

“Not only have we had higher rates because of these high natural gas prices, but we’ve also had higher usage,” said Phillip May, Entergy’s chief executive. Body

Louisiana Affairs. “It comes at a time when they are seeing higher grocery prices and higher gas prices.”

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In Louisiana, Entergy recoups fuel costs monthly, meaning customers felt a springtime increase in natural gas prices in June bills.

“Louisiana saw the effects of these gas prices immediately, faster than any other state, but these price changes are happening in every state,” Mr. May said.

Entergy’s fuel costs soared 91% in July from the same month last year, according to a report from the state utility regulator. Overall bills rose about 38%, Entergy Louisiana said.

A $150 monthly increase in his utility bills to around $320 prompted Chrystal Simon Boutte to use two white billboards purchased from Dollar General to create a Halloween costume that resembles a giant Entergy bill. “Bringing the scares,” she wrote in an August Facebook post of herself in costume — her head sticking out through a circle cutout — that got 1,400 likes and was shared 700 times.

“It’s a legitimate fear when I get my email alerts that my Entergy bill is ready. I would rather Michael Myers knock on my door right now,” Ms Boutte said of the villain from the “Halloween” movies.

Write to Katherine Blunt at [email protected] and Jennifer Hiller at [email protected]

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. electricity bills rise across country approach winter

. Electricity bills soaring country winter approaches

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