Cooling off from summer sizzle will cost nearly 4% more this year

A hose may be the cheapest way to cool off
this summer. (Photo by J. Tyson, Unsplash)

Summer sun and heat might be good for beachgoers, but climbing summer temperatures will mean spiking power bills for U.S. consumers. Reasons for ballooning energy costs include higher natural gas prices, grid upgrade costs passed on to utility customers and increased domestic demand.

"Electricity prices across the country have increased 4.5% in the past year, topping the 2.2% jump in the price of groceries," reports Jennifer Hiller of The Wall Street Journal. "Consumer prices rose 2.4% in May from a year earlier."

Whether U.S. consumers flip on fans or crank the air, most will pay roughly 4% more "because of a jump in natural gas prices, the largest source of power generation," Hiller explains. "Natural gas deliveries to power plants will cost about 50% more from June through September than last year."

That's painful. "The higher bills are putting a strain on the wallets of consumers who are already stretched thin by rising costs for food, shelter and insurance," Hiller writes. "The average household power bill will reach $784 for the combined period from June to September."

Many Americans started the summer months already behind on their electrical bills. "Mark Wolfe, the executive director at the National Energy Assistance Directors Association, said one of every six U.S. households is behind on their electricity or natural gas bills," Hiller reports. "Customers owed gas and electric utilities more than $24 billion in late payments as of March."

Despite the pinch consumers are bound to feel, several utility companies are asking regulators to approve rate increases. "In Florida, NextEra Energy’s Florida Power & Light is asking regulators to let it increase rates between 1% and 5% a year through 2029," Hiller adds. "About $9.3 billion in additional electricity costs will begin trickling down to customers in the PJM Interconnection, the country’s largest grid operator and wholesale electricity market."

In some markets, AI data centers are "stressing the grid." In other places, increased demand is partially driven by electric vehicles. "Across the U.S., the growing pains are sparking fights over how to pay for upgrades and costs," Hiller reports. "The power industry also warns that a rollback of the clean-energy tax credits offered under the Inflation Reduction Act would push electricity prices higher, too."