Energy prices have risen around the globe, and more price hikes are expected for Americans this coming winter.
According to the Bureau of Labor Statistics electricity bills in August saw their biggest jump since 1981, with a year-on-year rise of more than 15 percent.
Gas prices have been soaring due to the high demand for crude oil following the covid pandemic. The ongoing conflict in Ukraine has also forced prices to climb after the U.S. completely many imports from Russia.
The rising wholesale cost of power had also contributed to an increased cost of energy, with energy companies announcing plans to further raise prices this winter.
This month, the National Energy Assistance Directors Association estimated that the average household heating bills would rise by another 17 percent this winter to a 10-year high of about $1,200 per home.
The Energy Information Administration has also estimated an upcoming rise in electricity bills, with prices expected to climb 14.8 cents per kilowatt-hour, a 7.5 percent jump from 2021.
Around half of all U.S. homes use natural gas for their heating, further contributing to the high demands on the energy industry and encouraging electricity prices to rise 15.8 percent in the 12 months up to August.
National Grid, which supplies energy for residents in Massachusetts and New York, announced price increases last week.
The 64 percent price increase means average energy bills will jump from $179 to $293, with the firm planning further gas rates hikes by at least 22 percent.
Con Edison, a New York-based energy supplier, also told its customers to expect "substantially higher" bills starting in November.
The firm said its average monthly gas bill could rise from $348 to $460, a 32 percent increase year on year, with electricity costs expected to rise up to 27 percent.
Meanwhile, a recent Bank of America report showed that millions of Americans were already struggling with the cost of their household energy bills.
Just over one in six households, around 20 million households, has reportedly missed a payment entirely, or had made a late payment on their utility bill in the last month.
Low-income families are struggling the most with current price increases, as one in four households earning less than $50,000 either missed, or was late paying utilities.
Households with incomes of less than $150k saw their bills increase an average of 16 percent in August, while households with income over $150K saw smaller increases of just over 11 percent.
Households in Houston and Dallas registered the highest rises monthly payments, an almost 25 percent increase compared to 2021, while Las Vegas, Phoenix, and Portland, Oregon, reported the smallest rises at 0.7 percent, 2.1 percent and 3.2 percent, respectively.
The analysts with the Bank of America concluded that more households could continue to struggle with their payments if fuel prices don't drop soon.
They said: "If utility prices remain high, which seems quite possible given raised natural gas prices and the hedging dynamic that feathers - in the impact over two to three years, these households could come under pressure to make cuts in their other spending in order to keep the lights on."
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Emilia Shovelin is Newsweek's Personal Finance Reporter based in London, UK. Her focus is reporting on U.S. personal finance, property ... Read more
