Electric bills are going up as the amount of electricity available to consumers is decreasing, according to data released by two separate federal agencies.
Electricity production in the United States has steadily declined since an all-time high in 2007 even though America’s population has increased by 14 million people since then, the Department of Energy’s Energy Information Administration (EIA) said.
Meanwhile, electricity costs hit a record high in January 2014 according to the electricity price index compiled by the US Bureau of Labor Statistics (BLS). The average cost of electricity in the United States rose by 1.8 percent that month, continuing a trend previously reported by Off the Grid News.
The 1.8 percent increase was the largest since March 2010, a BLS press release noted. The price of electricity rose so sharply that it actually drove up the entire Consumer Price Index (CPI), which documents the cost of living in the United States, Motley Fool writer Justin Loiseau said.
Electricity costs are rising faster than other energy costs, according to the BLS. The overall energy price index only rose by .6 percent, which means electricity costs are rising at a rate that is more than double that for other kinds of power.
The cost of food rose by just .1 percent in January and the cost for nonalcoholic beverages actually fell by .2 percent.
Reason For Rise In Costs
The most likely reason for the electricity price increase is the shortage documented by the EIA. Basic economics dictates that when supplies fall, prices increase.
Some experts are blaming higher natural gas prices because natural gas is increasingly used as a fuel for power plants. CNBC reported that natural gas prices hit their highest level since 2010 in January because of increased demand caused by cold weather. Natural gas prices rose to more than $4 per thousand cubic feet but started falling again in March. Natural gas prices on commodities exchanges have been falling in recent weeks as spring approaches.
The shutting down of coal plants also could play a factor.
Earlier this year, US Sen. James Inhofe warned that the Obama administration’s restrictions on carbon dioxide emissions eventually would lead to blackouts in the winter months. The restrictions are aimed at coal plants, which provide nearly 40 percent of the nation’s energy.
“If this recent cold weather occurs again in a year or two when these plants are shut down there simply will not be enough electricity available to keep homes and businesses warm,” Inhofe said. “It could result in massive blackouts. When Americans need their electricity it will not be there. It will be as if we’re living in the 1600s and everyone will be cold.”
“These coal-fired power plants which were critical to keeping homes all around the country warm during the cold temperatures are going to be shut down because of Obama’s environmental regulations,” Inhofe added.
Use Of Solar Power Rises
The electricity price index seems to confirm predictions that US electric rates will increase dramatically in coming years. The Department of Energy predicted that electric costs could rise by 51 percent in the next 20 years, Off the Grid News reported.
The rising electricity costs are increasing interest in off-grid generation of electricity. According to a report by Greentech Media and the Solar Energy Industries Association, solar power had a record market growth of 41 percent in 2013 and made up 29 percent of new energy-generating capacities.