Thursday, December 15, 2011

Household Electricity Bills Skyrocket

Does it feel like your electricity bill has been going nowhere but up lately? You're not alone in that feeling. Just as the Great Recession has been taking a huge bite of of the finances of tens of millions of American households, electricty costs have deviated from their historic norms and are also putting pressure on family budgets, as reported by the USA Today:
Electric bills have skyrocketed in the last five years, a sharp reversal from a quarter-century when Americans enjoyed stable power bills even as they used more electricity.

Households paid a record $1,419 on average for electricity in 2010, the fifth consecutive yearly increase above the inflation rate, a USA TODAY analysis of government data found. The jump has added about $300 a year to what households pay for electricity. That's the largest sustained increase since a run-up in electricity prices during the 1970s.

Electricty is consuming a greater share of Americans' after-tax income than at any time since 1996 — about $1.50 of every $100 in income at a time when income growth has stagnated, a USA TODAY analysis of Bureau of Economic Analysis data found.

Greater electricity use at home and higher prices per kilowatt hour are both driving the higher costs, in roughly equal measure:

•Residential demand for power dropped briefly in 2009 but rebounded strongly last year to a record high. Air-conditioners and household appliances use less power than ever. A new refrigerator consumes half the electricity as a similar one bought in 1990. But consumers have bigger houses, more air-conditioning and more electronics than before, outpacing gains in efficiency and conservation.
As in many other areas of the American economy, aging infrastructure is a big factor causing the increase in costs:
Duke Energy says the rate increase is needed to pay for replacing old power plants and making the transmission system more reliable. The Charlotte-based utility has reached a tentative agreement with North Carolina to raise rates 7.2% in February, lower than its original 17% request.

"The industry as a whole is facing higher costs because we're retiring our aging fleet" of power plants, says Duke Energy spokeswoman Betsy Conway.
All of which is going to be yet another drag on consumer spending, which makes up about 70% of the American economy. That means there are soon going to be more abandoned shopping malls like the one I wrote about this morning.


  1. @Bill - sorry to comment so much, but you write a lot :-) Re: electricity costs - remember that the average human metabolizes food into 'work' at a 100Wh rate, so to power the average home, that uses 1000kWh per month, using humans, one would need three shifts of 14 people, 24/7. Figure that cost at minimum wage - it's a lot more than Reddy Kilowatt. don't forget the external costs of the people and resources one would need to support the staff.

  2. Right, Mr. Sunshine. Bill's points about the impact of higher electricity bills are relevant. But it's still pretty cheap. Consider the amount of work a gallon of gasoline can do. How much would you have to pay how many people to pull or push your loaded passenger van 20 miles? Would it be more than $4.00?

  3. @Mr. Sunshine - comments are always welcome provided they are constructive...and that was another fine one. :)

  4. @Patrick - yep, electricity is still very much a bargain considering all it does. Too bad our society is so unequal that its expense is now hammering the most vulnerable.

  5. Reading this sent me back looking for a story I found on Energy Bulletin some months back

    Review of Lieutenant Colonel Fleming’s U.S. Army War College thesis on Peak Oil

    He concluded
    A gallon of gasoline energy content is about 33 kilowatt-hours. In perspective, 33 kilowatt-hours is the equivalent of a healthy male pedaling a stationary bike for 330 hours – if he can maintain 100 watts per hour. If he pedals 40 hours per week, he will generate the same amount of energy as in one gallon of gasoline in about eight weeks.

    Mr Sunshine wrote “the average home, that uses 1000kWh per month” if Lieutenant Colonel Fleming’s calculations are right this is a monthly requirement of the energy equivelent of about 30 gallons of gasoline. There is at least a 60% inefficeny in electricity power generation and transmission, which means that the energy equivelent of about 90 gallons of gasoline has to be burned to produce enough power for the average house.

    At Fleming’s figure of 100 watts of cycling for 40 hours a week it would take one person 29700 hours to produce this much power. That is 742.5 weeks or 14.27 years, not allowing for any weeks off.

    A a cyclist I would add that 100 watts is lively cycing.