Housing costs predicted to skyrocket this summer, experts warn
Power bills are rising faster than grocery prices — and experts say it's only going to get worse this summer. Electricity costs jumped 4.5 percent last year — more than double the 2.2 percent rise in grocery prices — and energy analysts warn the surge isn't stopping anytime soon. A mix of soaring natural gas prices, massive utility investments, and a boom in data centers is fueling the spike. And with summer here, the Energy Information Administration predicts Americans will pay about 4 percent more for electricity this season compared to last.
Natural gas deliveries to power plants alone are expected to cost 50 percent more through September than they did during the same stretch last year. 'The more we export gas, the more domestic prices will begin to reflect international ones,' Hugh Wynne (Pictured) of Sector & Sovereign Research told the Wall Street Journal .. The average US household is expected to pay $784 in electricity costs between June and September, according to the National Energy Assistance Directors Association — a 4.2 percent increase from summer 2023.
The roots of this crisis trace back to the 2022 energy shock following Russia's invasion of Ukraine. While prices briefly cooled, utilities have since raised rates to help cover storm-proofing efforts and wildfire prevention — investments made more expensive by rising labor and materials costs.
Homebuyers had already been concerned over fears of an economic downturn before the Energy Information Administration concluded that electricity prices will outplace inflation through next year. Utility rises have also taken its toll on thousands of people like Adam Moore, an Indiana resident who was one of over 2,300 who protested CenterPoint Energy's plans to rise rates.
This increased bills by around $5 a month, which the company insisted was needed to cover investments for various things like grid improvements and new solar plants. Meanwhile, data centers are driving a new wave of demand. PJM Interconnection — the nation's largest electric grid operator — expects $9.3 billion in additional costs to be passed on to customers as more data hubs come online.
Pennsylvania utility regulators suggested residents consider searching for lower retail rates or conserve energy, since rates are set to rise 5% to 16% at most of its utilities. Even clean energy policy is under pressure. A rollback of tax credits from the Inflation Reduction Act could push electricity costs even higher.
Bottom line: with inflation-weary Americans already struggling, experts say power bills will likely keep climbing for at least the next 12 to 18 months. 'On both fronts, there's little reason to believe that ratepayers will see easing pressure on their pocketbooks,' said Akshat Kasliwal of PA Consulting Group.
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