Yesterday’s Consumer Price Index report brought good news for residential electric utility customers. Residential electric rates in August, year-over-year, were up by only 2.1 percent.
While the overall CPI was up 3.7 percent in the same timeframe. Meaning that electric rate increases on average were less than the rate of inflation.
This was hardly the case in the prior twelve-month period. From August 2021 to August 2022, electric rate increases averaged 15.8 percent. While the overall CPI was up 8.3 percent.
It turns out that the 2021-22 was anomalous.
During the twelve-month period prior to that one, August 2020 to August 2021, electricity rate increases averaged 5.2 percent. While the overall CPI was up 5.3 percent. So, in that period, electric rate increases and inflation were almost identical.
During the three twelve-month periods prior to that one, August 2017 to August 2018, August 2018 to August 2019, and August 2019 to August 2020, electric rates fell each year, by 0.5 percent, 0.1 percent, and by another 0.1 percent. While inflation in those three years was 2.7 percent, 1.7 percent, and 1.3 percent.
As a result, over the last six years, from August 2017 to August 2023, electric rates increased 23.6 percent. But inflation was 25.1 percent.
Electric rate increases were less than the rate of inflation. Notwithstanding that large increase in electric rates in 2021-22.