Energy prices have entered a new stratosphere and that’s going to make it much more costly
to cool your home these days. Natural gas prices are at their highest level in two and a half years and natural gas powers about 1/5 of the nation's utilities that make the electricity that runs the air conditioning in our homes. Meanwhile, the price of coal, which fires about half of U.S. power plants, has seen huge price spikes as well, due to surging energy use in China and India as well as diesel fuel costs to transport the coal.
On average, natural gas costs for the nation's power utilities' will surge about 64%, while coal costs will jump 7% this month, compared to a year ago.
Fortunately, the national average for electricity prices hasn't increased quite as much - residential electricity costs are expected to rise slightly less than 4% this year. But keep in mind, electricity costs are highly localized and some experts say it is only a matter of time before local utilities which set their summer electricity costs months ago are successful in urging their state utility boards to allow them to increase residential electricity prices.
Some parts of the country will see super spikes this summer. To be clear, they're not all classified as rate hikes - some are labeled "fuel recovery increases." Others just reflect the anticipated increase in the average customers' utility bills. But the bottom line is that people are feeling the pinch in their wallets.
In Virginia, Potomac Edison, citing high coal and natural gas prices, will raise rates 29% starting this week, pushing an average monthly residential bill from about $70 to $90. Customers of Public Service Co. of Oklahoma were socked with a 20% rise – due to rising fuel costs -- on June 1. New York's Con Edison is expects the typical customer’s utility bill will increase by 13% this summer.
The surge in gasoline prices has been hard to miss. You see the jump every time you fill up. But you may not pay much attention to your electric bill and may be in for quite a shock when you open the next one.