Now, electricity prices are surging in addition to all of the uncorked demand from the Covid-19 pandemic, when the global economic slowdown and pressure from policymakers kept a lid on utility bills.
“I think if we were to repeat this analysis for next year, there would probably be a little bit of an uptick this year, but the data that I’m looking at doesn’t suggest a really significant increase in the historical context,” said Geoffrey Blanford, the lead author of EPRI’s report.
But there isn’t just one story unfolding across the country.
The US has a particularly chaotic energy system. How much people pay to light their homes, stay warm, and get around varies a lot from state to state and even among neighbors. For example, Texas households tend to spend a larger share of their budgets on keeping their pickup trucks running, while families in Massachusetts spend a greater portion on staying warm.
So, no—we’re not in an energy crisis, but it’s unlikely that your power bills will come down anytime soon. There is some good news though: In the years ahead, Americans are actually poised to spend a smaller share of their incomes on energy overall as technology makes it more cost-effective to shift away from fossil fuels.
“In our forward-looking scenarios, one of the key drivers for change is electrification, particularly light-duty vehicles,” Blanford said. “This tends to actually reduce the energy wallet in real terms per household over time even as you’re spending more on electricity.” Though electric car sales have slowed down in the US, they are still rolling into more driveways. And as homes and appliances become more efficient, that will help reduce energy bills as well. Based on current trends, the average US household energy wallet will shrink by 36 percent by 2050, with state-level declines anywhere from 10 to 50 percent, according to the report.