Every month this column gives you a glimpse of our analysis of the best measure of electricity’s affordability – electric bills as a percent of personal consumption expenditures. Thanks to the Commerce Department’s calculation of the gross domestic product, the data (and our analysis) is accurate, timely and complete all the way back to January 1959.
When electric bills were a much higher percent of consumption expenditures, as in the 1980’s, when it peaked at 2.53 percent, electricity was difficult to afford for many households. When electric bills are a low percent of consumption expenditures, as presently, when it is typically at 1.33 percent, electricity is difficult to afford for far fewer households.
This August, electric bills were 1.33 percent of consumption expenditures. As they were in July. As they were in June. In May, they were just a tick higher, at 1.34 percent.
Indeed, in the thirty-four months since November 2015, the monthly average was 1.35 percent. This is a historic period of low electric bills as a percent of consumption expenditures.
As a comparison, in the hundred and ninety months from January 2000 through October 2015, the monthly average was significantly higher, at 1.50 percent.
The fall from 1.50 percent to 1.35 percent may not seem like a lot at first. But consider this. It’s a one-tenth fall. For the more affluent in our society, that’s more money in their checking accounts to pay for all the other necessities and some luxuries too. And for the less affluent, that’s fewer of them who’ll have to struggle to pay the electric bill.
Do you work at a utility? This year, we’re phasing out individual subscriptions to Public Utilities Fortnightly for anyone at an organization with over a hundred employees – utilities and non-utilities alike. We’ll make it easy and economical for your company to sign up for an organization-wide membership that’ll cover any and all employees.
Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly, and President, Lines Up, Inc.
E-mail me: mitnick@fortnightly.com