Electricity costs remain high and are alarming Americans. The latest inflation reading showed that the electricity index rose 3.8% in the last twelve months.
This is largely because infrastructure costs have prevented utility companies from lowering prices. The industry is estimated to spend over $100 billion annually to maintain aging networks and invest in renewable technologies.
A large amount of residential electricity in the U.S. is generated from natural gas, the price of which has fallen more than 30% this year to date. However, families will not see these drops reflected in their utility bills anytime soon.
The necessary investments and the push to generate renewable energy will prevent any decreases in the prices of fossil fuels used to generate electricity. In other words, these industries are passing the costs of investments onto their customers.
Last year, PG&E (PCG) in California was granted permission to raise rates by 13% for its 16 million customers. The company promised to invest more than half of its revenue in its wildfire risk management plans.
Once rates go up, they are unlikely to come down.
The last time families recorded an average decline in their utility costs was in 2016, when low natural gas prices encouraged the industry to use more of this fuel for power generation.
For 2024, rates projected by the Energy Information Administration will decrease in some states by up to 4% and increase in others by up to 3%, for an average decline of 1% this year.
Source: AOL