US utility customers, facing some of their biggest bills in years, are set to pay even more this winter as natural gas prices continue to rise.
Natural gas prices have more than doubled this year due to a global supply shortage exacerbated by the war in Ukraine, and are expected to remain elevated for months as the fuel is needed to light and heat homes in during the winter. The tight supply has made it much more expensive for utilities to buy or produce power, and those costs are being passed on to customers.
From New Hampshire to Louisiana, customers’ electricity rates are on the rise. The Energy Information Administration expects the average residential price of electricity to be 14.8 cents per kilowatt hour in 2022, up 7.5% from 2021. The agency’s forecasts record gas consumption this year amid surging prices, in part because producers limited power in their abilities. burning coal instead due to supply constraints and plant shutdowns.
Electricity prices have risen in many parts of the country along with natural gas prices as exporters ship the most fuel overseas due to supply shortages in Europe, which is working to reduce its dependence on Russian supplies. Natural gas producers, hit by pipeline restrictions and investors pushing for austerity, have not increased production enough to ease the pressure.
The US consumer price index for electricity in August climbed 15.8% over the same month a year ago, the largest such 12-month increase since 1981, according to a report from the US Bureau of Labor Statistics.
The pressure is particularly acute in New England. The region is investing heavily in renewable energy sources, but many of these projects are not yet operational, and it still relies heavily on natural gas for electricity production. The region has limited pipeline capacity and imports large quantities of liquefied natural gas, which is in shorter supply as a result of European demand.
A utility company that serves about four million electricity and natural gas customers in Connecticut, Massachusetts and New Hampshire implemented an unprecedented price increase for customers in New Hampshire last month. Rates doubled from about 10.67 cents to 22.57 cents per kilowatt and will remain at that level until January.
James Daly, Eversource’s vice president of energy supply, said rate increases appear to be particularly steep in New Hampshire because regulations require the company to contract for smaller supplies than in other states. , where price increases are more gradual as a result. He said wholesale electricity prices have roughly tripled since 2020, reaching $130 per megawatt hour during peak demand periods.
“The impact of the war in Ukraine is still visible on liquefied natural gas prices, and that affects our winter supply situation,” he said.
Donald Kreis, who works on behalf of utility customers through the New Hampshire Office of the Consumer Advocate, said his office has recently seen a sharp increase in calls from customers worried about their ability to handle the jump in electricity prices. Natural gas and fuel oil delivery costs have also increased, making home heating more expensive as it gets colder.
“People are very worried because winter is coming,” he said.
The National Association of Energy Assistance Directors predicts the highest winter heating season in a decade — a 35% jump to an average of $1,202 from two seasons ago — and a likely shock for consumers.
“For families with limited discretionary income, this is a very significant burden because we’ve had a long period of very affordable home energy,” said Mark Wolfe, executive director of the group, which represents the program’s state directors. federal to help low. – people are behind the energy bills. About one in six American households are already behind on utility bills, NEADA estimates.
Duke Energy Corp.
, a North Carolina-based utility company that provides electricity and natural gas in parts of seven states, is working to manage gas price volatility with hedging strategies. The company recently warned residential customers in Florida, where regulations restrict fencing, to expect bills to rise an average of 13% starting in January.
“The spot prices we see for natural gas are very alarming,” said Nelson Peeler, Duke’s senior vice president of transmission and fuel strategy. He added that with such high prices, fuel costs can account for at least 30% of a monthly bill.
In Louisiana, where power generation is leaning heavily toward natural gas, rising fuel costs are coming on top of recovery fees that utilities charge to pay for damage from a series of relentless storms that have battered the state. Because of the very hot June and July people were using more air conditioning than usual.
“Those high natural gas prices have not only resulted in higher rates, we’ve also had higher utilization,” said Phillip May, Entergy’s chief executive Corp
Louisiana business. “It’s coming at a time when they’re seeing higher grocery prices and higher gasoline prices.”
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In Louisiana, Entergy recovers fuel costs monthly, which meant customers felt a spring increase in natural gas prices in June bills.
“Louisiana saw the effects of these gas prices immediately, faster than just about any other state, but those price changes are coming to every state,” Mr. May said.
Entergy’s fuel charges rose 91% in July over the same month last year, according to a report from the state utility regulator. Overall bills rose about 38%, Louisiana Entergy said.
A $150 monthly jump in her utility bills to about $320 prompted Chrystal Simon Boutte to use two blank poster boards purchased at Dollar General to create a Halloween costume that resembles a giant Entergy bill. “Bringing the fear,” she wrote in a Facebook post in August of herself in clothes – one picking out by cutting out circles – which received 1,400 likes and was shared 700 times.
“It’s a legit scare when I get my email alerts that my Entergy bill is ready. I’d rather have Michael Myers knocking on my door right now,” Mrs. Boutte said of the villain from the “Halloween” movies.
Write to Katherine Blunt at Katherine.Blunt@wsj.com and Jennifer Hiller at email@example.com
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