America’s electric bill, two to three percent since the 1950’s, now steadily two percent
There are several good measures of what electricity costs us. What's the best? Let's try dividing the total of all our electric bills into America's gross domestic product, its GDP.
This way, we capture all our expenditures on electric service. Whether directly through residential bills. Or indirectly through the bills paid by businesses and institutions that we ultimately pay for (through our purchases of all goods and services).
In 1960, 1965 and 1970, our collective electric bills as a percentage of GDP were 2.0 to 2.1 percent. This was before the oil embargo shook our electric industry.
In 1975, electric bills as a percentage of GDP has risen to 2.8 percent. By 1980 and 1985, it had risen to 3.3 to 3.4 percent. Electricity was relatively expensive in those post disco days.
Utilities and utility regulators made the adjustment. By 1990, electric bills fell to 3.0 percent of GDP. The percentage fell further by 1995, to 2.7 percent. And by 2000, to 2.3 percent.
That's pretty much where we've stayed since. Electricity was still 2.3 percent of GDP in 2005. It ticked up in 2010, during the great recession (with a weak GDP), to 2.5 percent.
Last year, 2015, it looks like the number will come in at 2.2 percent. That's in line with the period before the oil embargo of the seventies.
Difficult to imagine electricity getting much cheaper as a share of GDP. Especially when one considers our ever-increasing hyper-dependence on electric machines, appliances and devices in virtually every aspect of our lives.
Keep your e-mails coming, commenting on these columns. We've received some great ideas, for new looks at the numbers, to offer fresh perspectives on our industry's common assumptions. Upcoming columns and analyses in our magazine Public Utilities Fortnightly will shamelessly use these ideas for the benefit of our whole industry.
Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
E-mail me: mitnick@fortnightly.com
