Sky-high electricity bills are inflation’s latest flashpoint: NPR

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Vehicles drive past a sign on the 110 Freeway warning of extreme heat and urging energy conservation during a heat wave in downtown Los Angeles on September 2.

Patrick T. Fallon/AFP via Getty Images


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Vehicles drive past a sign on the 110 Freeway warning of extreme heat and urging energy conservation during a heat wave in downtown Los Angeles on September 2.

Patrick T. Fallon/AFP via Getty Images

Inflation may have cooled off last month, thanks in part to falling gasoline prices, but for many families there’s another big strain on their household budget: rising electricity bills.

Take Bernice Brown, a retiree from Tuscaloosa, Ala., for example. In both July and August, her energy bill exceeded a staggering $400.

“It’s been detrimental to be honest,” she says.

But there is little she can do about it.

“The heat here is horrible,” he says, noting that his neighborhood near the University of Alabama campus doesn’t have many shade trees. “The houses are sitting, baking.”

A Labor Department report on Tuesday is expected to show the country’s annual inflation rate fell in August from 8.5% in July. But many families still struggle with the rising cost of food, rent and other essentials like electricity.

Electricity prices have risen sharply in the past year, largely as a result of high-priced natural gas, which is used to generate nearly 40% of the country’s power.

Rising energy prices have been exacerbated by high temperatures, which have caused air conditioners to run overtime.

“It was one heat wave after another,” said Mark Wolfe, executive director of the National Association of Energy Assistance Directors. “Families need to use air conditioning to stay safe.”

NEADA estimates the refrigeration costs of an average family increased from $450 last summer to around $600 this year.

six months of summer

Electric bills for Dale Cooper in Phoenix are even higher.

“We have six months of summer with 100+ degree heat,” says Cooper, who makes $13.50 an hour as a restaurant cashier. “If I didn’t have roommates, I wouldn’t be able to survive on the salary I have.”

While Cooper, who is 59, will likely get a discount on utility costs during Phoenix’s mild winter, people in colder parts of the country are likely to face significantly higher heating bills.

A plane takes off from Los Angeles International Airport (LAX), with power lines visible at sunset as the California Independent System Operator announced a statewide electricity Flex Alert urging conservation to avoid blackouts in El Segundo, California, on August 31.

Patrick T. Fallon/AFP via Getty Images


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Patrick T. Fallon/AFP via Getty Images


A plane takes off from Los Angeles International Airport (LAX), with power lines visible at sunset as the California Independent System Operator announced a statewide electricity Flex Alert urging conservation to avoid blackouts in El Segundo, California, on August 31.

Patrick T. Fallon/AFP via Getty Images

NEADA predicts the average family You will pay $1,202 to heat your home this winter, 17% more than last year. For the six out of 10 families whose heat comes from natural gas, the increase in heating costs could be 34%.

“There’s no sign these prices are going down,” says Wolfe. “All signs point to higher home heating costs, and they could go up if it gets cold.”

NEADA says more than 20 million families they have fallen behind on their utility bills and the average amount they owe has risen to $792, nearly double what it was before the pandemic.

“It’s not about whether families heat and cool their homes responsibly,” says Wolfe. “Families do this. They turn the heat down as low as they can. They use the air conditioner sparingly. It’s just that the cost of home heating and cooling has gone up so much that low-income families are having a hard time paying these bills.” .”

Other costs still sting

Heating and air conditioning bills add to the rising costs of other essentials, like housing and food.

“For decent, healthy food, the prices are extremely high,” said Brown, in Tuscaloosa.

That keeps the Federal Reserve on guard, even as headline inflation was tempered last month by the sharp drop in gasoline prices. Gasoline prices fell almost 40 cents a gallon during August to $3.84, according to the American Automobile Association.

Gas prices are among the most visible in the country and often have an outsized psychological impact. As pump prices have dropped, Americans’ concerns about inflation have also eased somewhat.

a new NPR/PBS news hour/marist survey finds that inflation is the number one concern for 30% of adults this fall, down from 37% in July.

Despite the drop in gasoline prices, Fed officials say they are still not satisfied that headline inflation is receding toward their 2% target.

“I got burned out last year,” Fed Governor Christopher Waller said in a speech last week.

He noted that inflation appeared to be falling last summer only for prices to take off again in the fall.

“We’re very cautious that we don’t get burned again,” Waller said. “So it has to be a real, permanent, longer-term decline than what happened last year.”

The Fed is expected to raise interest rates by another 0.75 percentage point next week and keep borrowing costs high until officials are sure prices, including for essentials like electricity, are under control. .

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