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If it seems like your energy bills have fell victim to price creep, you’re right. Data from the U.S. Bureau of Labor Statistics and the Energy Information Administration suggest that U.S. consumers have seen the largest increase in natural gas and electricity bills in decades.
For starters, the U.S. Bureau of Labor Statistics said that nat gas bills in September were 33% higher than last September. While natural gas bills are often confusing and filled with a barrage of surcharges and taxes, such as gas recovery and distribution charges as well as taxes, the rise in electricity bills has been hard for consumers to miss.
The confirmation that residents have indeed seen a significant uptick in energy costs over the last year is likely cold comfort. But residents should grab their winter coats, because those high prices are here to stay.
The EIA is forecasting a colder-than-expected winter this year, meaning there will be more demand for heat, along with higher costs for natural gas and propane. According to its Winter Fuels Outlook, natural gas bills are expected to be 28% higher this season. Heating oil bills are expected to be 27% higher. Propane, 5% higher, and electricity bills, 10% higher. And that’s just the EIA’s base case scenario.
Should temperatures be 10% colder than that base-case scenario, the EIA is projecting that U.S. average household expenditures between October and March for natural gas will be 51% higher than last winter, at $1,096. Propane costs under that scenario are seen as 36% higher.
Even in a scenario that results in a 10% warmer than forecast winter, natural gas bills are expected to be 19% higher than they were last winter season.
The estimated costs are largely in line with the price increases seen thus far. September’s natural gas price increases that were 33% higher than last September was actually the eighteenth straight double-digit percentage gain—the longest streak in more than three decades, according to a Bloomberg analysis of the U.S. Bureau of Labor Statistics data.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.