U.S. residential electricity bills rose 5 percent in 2022 after adjusting for inflation
According to a new report from the U.S. Energy Information Administration (EIA), the average residential electricity bill for customers nationwide increased from $121 per month to $137 per month – a 5 percent increase, after adjusting for 40-year high inflation rates.
U.S. inflation itself reached 8 percent last year, hitting sectors throughout the nation’s economy. However, it also came at a time when, the EIA calculated, average residential electricity spending saw its largest annual increase since tracking began in 1984. Extreme temperatures, higher fuel costs and more contributed to the issue, driving consumption and retail electricity prices alike.
Put into figures, residential electricity customers’ average monthly consumption increased from 886 kW hours (kWh) in 2021 to 907 kWh in 2022. More heating was used in the winter and more air conditioning in the summer, and since electricity bills are based on the amount of electricity consumed and retail electricity price, it came for their wallets as well. The EIA noted that the average U.S. residential retail electricity price hit 15.12 cents/kWh in 2022, up from 13.66 cent/kWh the previous year – a jump of 2.5 percent, after adjusting for inflation.
On the fuel cost side of things, prices of natural gas, coal and petroleum delivered to U.S. power plants increased 34 percent last year. In 2022, they reached $5.13 per million British thermal units (MMBtu), up from $3.82/MMBTU in 2021, driving retail electricity prices higher in turn.
Price raises seem set to continue this year, with the first three months of 2023 bringing the average U.S. residential monthly electric bill to $133 – 5 percent higher than the same time last year. While a 7 percent decrease in average monthly electricity consumption per residential customer has helped offset some costs, the average residential retail electricity price rose 13 percent.
As a result, the EIA predicted that this summer, typical household electricity bills will be similar to those faced last year. Customers should expect to pay about 2 percent more, on average.
