Study: Despite Gains in Energy Efficiency and Green Energy Generation - Electricity Bills Have Increased 27% since 2015
Energy Conservation Being Outpaced by Rising Electric Rates
For many Americans, August is the hottest month of summer. Afterall, that's when electricity consumers run their air conditioners the most and, as a result, usually pay their highest power bills. Back in June as summer began, many analysts forecasted that 2024 would be one of the hottest on record. Many also expected that intense air conditioning use would force power plants to burn up the natural gas surplus left over from a record-setting warm winter. Combined with utilities charging customers more each year for grid upgrades and expansions, the smart money was betting that August electricity bills would explode.
So as August 2024 simmers along, consumers are more anxious than ever about the coming dog days of summer.
To learn just how expensive late summer energy bills actually might be for consumers, we analyzed EIA residential electricity data for every August from 2015 to 2023. While the data suggests hot weather conditions are not quite as bad (so far) as last year, most consumers are seeing their local utilities continuing to raise their rates at a painful -- if not unsustainable-- rate.
Three take aways that consumers need to know about:
- August bills in all states increased from 2015 to 2023 by an average of nearly 27%. That roughly equals a hike of $40.
- Utility rates over the same period rose on average by 23.2%.
- The average August residential kWh consumption fell during the same period by 2.83%.
The 10 States With the Highest Average Increased Bills
| State | August 2015 bill | August 2023 bill | % increase | August 2015 kWh used | August 2023 kWh used | % change |
|---|---|---|---|---|---|---|
| Maine | $88.96 | $151.77 | 70.6% | 574.29 | 596.82 | 3.92% |
| California | $123.18 | $202.93 | 64.74% | 675.35 | 680.05 | 0.7% |
| New Hampshire | $120.06 | $177.22 | 47.61% | 700.85 | 677.69 | -3.3% |
| Massachusetts | $133.42 | $196.77 | 47.48% | 741.61 | 707.04 | -4.66% |
| Florida | $164.32 | $225.67 | 37.34% | 1396.07 | 1511.55 | 8.27% |
| Connecticut | $167.02 | $227.31 | 36.10% | 868.55 | 815.02 | -6.16 |
| Oklahoma | $154.69 | $208.26 | 34.63% | 1506.27 | 1567.01 | 4.03% |
| Montana | $85.12 | $112.63 | 32.32% | 752.63 | 869.06 | 15.47% |
| Rhode Island | $148.08 | $195.94 | 32.32% | 785.13 | 710.43 | -9.51% |
| Texas | $193.97 | $254.71 | 31.31% | 1685.24 | 1818.06 | 7.88% |
*Note -- EIA data bundles generator supply, transmission, and distribution rates into one average billed amount.
The New England states all saw declines in their residential electricity usage but experienced some of the highest increases to their August bills. And while other states did use more electricity over the same time period, that amount barely came close to 10%. Even in California, where consumer bills jumped by 64.74%, the consumption per kWh only rose by 0.7%.
But higher customer usage isn’t uniform. For example, in New Mexico the average August usage grew by 16.16% but August bills increased at what appears to be a somewhat measured 28.55%.
Finally, the state with the lowest increase for the period was New Jersey where rates rose by only 0.24% and usage fell by 9.73%.
Conservation is Losing Ground to Higher Rates
EIA data shows that an average residential household is not using more and more electricity in August. So, this fact suggests this isn’t what’s driving higher electricity bills. In terms of August cooling demand, data for past hot summers only showed a slight increase in usage in average August bills. In one key example, during August 2016 (one that NASA lists as one of the hottest months on record), the average residential US kWh usage was 74.28 kWh higher than the somewhat cooler 2015. Yet, both average 2015 and 2016 prices per kWh were 12.9 cents; the differences in bills was about $10.00.
But, starting in 2018, US consumers saw their bills increase every August by an average of 2.74%, the highest hike coming in 2022 when bills rose by 14.24%. This was also reflected in rates which rose year to year by an average of 3.16%.
Yet, the increase was not found in kWh consumption. In fact, average usage over the same period fell from 1066.06 kWh in 2017 to 1143.39 kWh in 2023. That’s a year to year average decrease of -0.40%.
Even those who spent on home energy efficiency improvements for continual savings have seen their bills increase as well. For example, an ENERGY STAR Qualified Air Source Heat Pumps estimate calculator shows a heat pump system installed in 2015 in Bridgeport, CT, would have an annual operating cost of $1,875. By 2023, rate hikes raised the estimated cost to $2,715.
To be clear, energy efficiency improvements to your home do help cut bills. And that's especially true for less energy efficient homes where monthly bills can be most painful. If there's one thing that these higher utility rates and bills highlight it's that any improvement to home's energy efficiency can potentially reduce annual energy costs by hundreds of dollars (or more).
What Your August 2024 Bill Might Really Cost You
The current EIA Short Term Energy Outlook (STEO) forecast puts the average US electric rate at 16.2 cents per kWh for 2024. For August 2024 bills, we calculated the STEO estimated rates for different census regions using our findings for August usage. Because STEO summer usage is based on an average of all summer months, their estimate tended to be lower than the average amount found in our study period.
In order to better reflect August usage trends, we chose to use the median kWh usage for the 2015-2023 period.
| Census Division | EIA Forecast Rate | Median August consumption 2015 to 2023 | Forecast August 2024 Bill |
|---|---|---|---|
| New England | 0.2527 | 760.21 kWh | $192.11 |
| Middle Atlantic | 0.2098 | 904.70 kWh | $189.81 |
| East North Central | 0.1564 | 942.51 kWh | $147.41 |
| West North Central | 0.1393 | 1070.02 kWh | $149.05 |
| South Atlantic | 0.1396 | 1349.70 kWh | $188.42 |
| East South Central | 0.1305 | 1475.32 kWh | $192.53 |
| West South Central | 0.1386 | 1599.62 kWh | $221.71 |
| Mountain | 0.1377 | 1194.36 kWh | $164.46 |
| Pacific | 0.2566 | 779.90 kWh | $200.12 |
| U.S. Average | 0.162 | 581.53 kWh | $94.21 |
Top Three Regions likely to have the highest August electricity bills
$221.71 West South Central: Arkansas, Louisiana, Oklahoma, Texas
$192.53 East South Central: Alabama, Kentucky, Mississippi, Tennessee
$192.11 New England: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont
Methodology
August data was gathered from EIA Electricity Monthly reports (October reports contain August) from 2015 through 2023. Information from Tables 5.5A (sales) and 5.8 (residential customers served) were used to compute average bills for August. Table 5.6.A (average rates) provided information to further calculate average residential usage. Average August bills, utility rates, and usage was then compared over the study period.
Questions:
Were there any noticeable effects in usage you can attribute to global warming?
Global warming is definitely contributing to changes in climate. However, because of the study's short time frame, we were only able to attribute our findings of NOAA data for Cooling Degree Days (CDD) to possible effects from other yearly climate phenomena, such as the El Niño-Southern Oscillation (ENSO).
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