U.S. consumers from New York to California are experiencing "rate shock" on their latest utility bills as the global energy crisis drives up prices for fossil fuels, forcing tough financial decisions for families getting squeezed on all sides.
The increase is becoming a problem for Dave Croyle, 75, a San Diego retiree with multiple health issues that keep him largely housebound. In the past his power expenses were about $250 a month, but his most recent bill shot up to $508.
He lives on a fixed income of Social Security and pension payments and said the higher costs mean his expenses are now exceeding his earnings, so he has to draw on savings to cover the balance. He'd like to have his home health aide visit twice a week instead of once, but he just can't afford it when utility costs are piling up.
"It's not where I want to be spending my money — on my electric bill," Croyle said.
The strain from electricity costs comes at a time when U.S. inflation is already running at a 40-year high. Food prices are climbing, gasoline is surging and housing expenses are up.
All that is taking a bigger bite from consumers' wallets, especially for low-income people who were already disproportionately affected by the pandemic, according to John Drew, chief executive officer of the non-profit group Action for Boston Community Development.
"The roof is falling down on lower-income people," Drew said.
Nationally, about 21 million customers were behind on their utility bills in December, according to the latest data from the National Energy Assistance Directors Association in Washington. That number is down from a year ago as some critical public assistance programs helped to ease financial pressures.
But now, many of those programs have ended, exacerbating the burden just as energy prices are soaring, said Mark Wolfe, executive director of the group. The Biden administration's expanded child tax credit, for example, expired at the end of 2021.
"Lower-income families have less discretionary income in their budget, so when one cost goes up, something else has to give," Wolfe said.
Elevated Prices
Bills are likely to stay high. U.S. natural gas prices are still soaring, and tight global supplies means there is little relief in sight.
Consumers typically use less power in the spring, since milder weather means they neither have to crank up the heat nor the air conditioning. But electricity rates themselves will likely be up because of the rising fuel costs.
