August electricity bills for U.S. consumers jumped the most since 1981, gaining 15.8% from the same period a year ago, according to the U.S. Bureau of Labor Statistics.
Natural gas bills, which crept back up last month after dipping in July, surged 33% from the same month last year, labor data released Tuesday showed. Broader energy costs slipped for a second consecutive month because of lower gasoline and fuel oil prices. Even with that drop, total energy costs were still about 24% above August 2021 levels.
Electricity costs are relentlessly climbing because prices for the two biggest power-plant fuels — natural gas and coal — have surged in the last year as the U.S. economy rebounds from the pandemic and as Russia’s war in Ukraine triggers an energy crisis in Europe. Another factor is the hot and humid summer across most of the lower 48 states drove households and businesses to crank up air conditioners. Americans likely used a record amount of power in the third quarter, according to U.S. Energy Information Administration projections.
New York’s state grid operator warned of a “sharp rise in wholesale electric costs expected this winter” with spiking global demand for fossil fuels, lagging supply and instability from Russia’s war in Ukraine driving up oil and gas prices, according to a Tuesday report. Geopolitical factors are ultimately reflected in wholesale electricity prices and supply charges to consumer bills, the New York Independent System Operator said.
Electricity price futures for this winter have increased fourfold from last year, with prices averaging near $200 a megawatt-hour, the grid operator said. That has been driven by natural gas futures for the upcoming winter, which are more than double current prices to nearly $20 per million British thermal units.