Mr Global strikes again. Matt Randolph is VP and co founder of Sentinel Energy, an oil/gas firm in Oklahoma. Randolph blames energy price rises on the cost of transmission and distribution, and increased exports of natural gas, and the cancellation of renewable projects.
Below, Joe Dominguez, CEO of Constellation Energy, one of the country’s largest utilities, reinforces that, saying “gas sets the price of energy, 90 percent of the time.”
America’s power bills are rising even faster than the cost of groceries.
Higher natural-gas prices are partly to blame. Utilities investing billions of dollars to stabilize the aging electric grid are passing those costs on to customers, too. And in some states, huge data centers are pushing power prices higher as electricity supplies tighten.
Electricity prices across the country have increased 4.5% in the past year, according to Labor Department data released Wednesday, topping the 2.2% jump in the price of groceries. More broadly, consumer prices rose 2.4% in May from a year earlier.
Electric bills are expected to keep climbing this summer along with the temperatures. The Energy Information Administration expects the average U.S. residential electric bill to be about 4% higher this summer than last, mostly because of a jump in natural-gas prices, the largest source of power generation. Natural gas deliveries to power plants will cost about 50% more from June through September than last year.
Hugh Wynne, an analyst with Sector & Sovereign Research, said expected increases in liquefied natural gas exports are likely to continue to pressure power prices in the long term. “The more we export gas, the more the domestic price will begin to reflect the international price,” Wynne said.
President Trump, who as a candidate promised to cut electric bills in half within 18 months, has blamed wind and solar power for soaring costs. Democrats say the problem is Mr. Trump’s throttling of renewable energy, while others point to the rapid spread of energy-hungry data centers.
But the factors driving electricity rates are often more complicated and depend on where you live, according to a comprehensive new study by researchers at Lawrence Berkeley National Laboratory.
Not all states are suffering equally. Over the past six years, the average retail price of electricity has risen faster than inflation in 26 states. But rates have stayed flat or even declined in the rest of the country in real terms (that is, they’ve grown more slowly than overall inflation).
Many states that have seen a major expansion of wind and solar power, like Nevada or North Dakota, have seen prices stay flat or decline, although there are some important exceptions to this rule. California is a leader in renewable energy but has seen some of the largest electricity rate increases in the country, in part because devastating wildfires have imposed steep costs on utilities, which often get passed onto households. In the Northeast, states have struggled with high natural gas prices.
