Energy prices in the United States are wreaking havoc on budget-sensitive households, making it harder for families to save money or get ahead financially.
Since President Joe Biden took office in January 2021, Americans’ electricity bills have skyrocketed nearly 30%, or 13 times faster than in the previous seven years, according to a Wall Street Journal analysis of the latest consumer price index data.
The data showed that the energy index rose by 1.1% in March following a 2.3% increase in February. The gasoline and electricity index also increased in March, climbing 1.7% and 0.9%, respectively. The U.S. Bureau of Labor Statistics (BLS) reports that the energy index jumped 2.1%, the gasoline index increased 1.3%, and the electricity index soared 5.0% annually.
Despite the Federal Reserve holding interest rates steady since July 2023, inflation continues to pose a problem for policymakers and households.
“There is no improvement here, we’re moving in the wrong direction,” said Bankrate chief financial analyst Greg McBride in an interview with Fox Business. “The usual trouble spots persist — shelter, motor vehicle insurance, maintenance, repairs, and service costs. Add electricity to that list, up 0.9% in March and 5% over the past year.”
Part of the reason for the surge in energy prices is due to the push to replace fossil fuels and nuclear power plants with renewable subsidies and green-energy mandates.
Despite the Biden administration passing the Inflation Reduction Act in 2022, the law has done little to lower energy prices. For example, the average cost of electricity has jumped from $0.136 per kilowatt hour in January 2021 to $0.174 per kilowatt hour in March 2024, a nearly 28% increase, BLS data shows.
The U.S. Energy Information Administration expects hotter summer temperatures this year, so the agency forecasts an annualized 4% rise in residential electricity consumption. This means the average household’s electricity bill will be much more expensive in 2024 than in 2023.
