Thanks to cheap natural gas, electricity prices have been a relatively stable part of Americans’ budgets for many years. But the commodity’s price surge this year could lead to a rude awakening for consumers and a moment of reflection for policy makers.
Consumers spent 16% more on utility payments in August than they had a year earlier, according to Bank of America. The U.S. Energy Information Administration said last week that it expects retail electricity prices to surge 7.5% this year. That would be the biggest percentage jump since 2006, when prices rose 10.4% in tandem with rising natural-gas prices—the culprit this time, too. The price of natural gas, which accounts for 38% of U.S. power generation, has more than doubled so far this year.
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