CPI, Electricity, Gas
Over the last ten years, the inflation in residential electric rates, on average nationally, has been less than the increase in the Consumer Price Index in seven of those years. This has been the case in the last two years, ever so slightly, with electric rate inflation coming in at one tenth of a percent less than the CPI increase.
See Figure 1.
Electric rate inflation in December 2024 was 2.8 percent, year-over-year. While the CPI increase was 2.9 percent.
Of course, electric rate inflation two years earlier, in December 2022, was a setback for American households. It was 14.3 percent. While the CPI increase was 6.5 percent.
Little wonder that energy affordability became much more of a concern during that period.
Figure 1 - Avg. U.S. Residential Electric & Natural Gas Rate Inflation v. CPI, Dec. 2015-Dec. 2024 Year-over-Year
Natural gas inflation was a primary cause. This can be seen by looking at residential natural gas rate inflation in December 2021, which was 24.1 percent, and in December 2022, which was 19.3 percent. Many households were challenged by higher electric bills and higher gas bills simultaneously.
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