Electric bills are around four percent of expenditures for low-income households versus around two percent for high-income households
Today we continue to mine the mother lode, the Labor Department’s Consumer Expenditure Survey. In extraordinary detail, it reports what households spent last year for everything.
Let’s look at electric bills by income. There are fascinating implications for utility regulation and policy.
As we wrote last week, a household’s electric service averaged $4.00 daily. Or 2.6 percent of all consumer expenditures.
The percentage is actually much lower, when including expenditures made on behalf of consumers. Particularly expenditures by government and insurance funds made on behalf of consumers.
Electricity’s income differences are dramatic.
For households in the lowest ten percent of income before taxes, electric bills averaged only $2.56 daily. Though that’s as much as 3.9 percent of their consumer expenditures.
These 12.9 million households averaged income of just $6,063. But their expenditures for all goods and services averaged $23,705.
For households in the second-lowest ten percent of income, electric bills averaged only $2.99 daily. Though that’s as much as 4.3 percent of their expenditures.
These 12.8 million households averaged income of just $15,806. But their expenditures for all goods and services averaged $25,244.
For households in the third-lowest ten percent of income, electric bills averaged only $3.47 daily. Though that’s as much as 3.9 percent of their expenditures.
These 12.8 million households averaged income of just $23,902. But their expenditures for all goods and services averaged $32,545.
In contrast, for households in the highest ten percent of income, electric bills averaged $5.64 daily. Though that’s only 1.9 percent of their expenditures.
These 12.9 million households averaged income of $235,160. But their expenditures for all goods and services averaged $133,180.
For households in the second-highest ten percent of income, electric bills averaged $4.95 daily. Though that’s only 2.1 percent of their expenditures.
These 12.9 million households averaged income of $120,634. But their expenditures for all goods and services averaged $87,860.
Those fascinating implications?
Low-income households generally pay considerably lower electric bills than high-income households. For the bottom two income groups, electricity averages less than $3.00 daily.
However, the electric bills of these low-income households are generally a considerably higher percentage of their expenditures on all goods and services. Compared to the electric bills of high-income households.
Electric bills are around four percent of expenditures for low-income households. Versus around two percent of expenditures for high-income households.
Concerned about shifts in utility costs from high-income to low-income households? These results highlight the added burden of such shifts on the most hard-pressed Americans.
Number-crunching courtesy of Public Utilities Fortnightly.
Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
E-mail me: mitnick@fortnightly.com
