Inflation Generation

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On May 11, the government released the Consumer Price Index data for April. The overall CPI, for all goods and services that Americans buy, was up 8.3 percent year-over-year.

The component of the CPI for electricity solely, that is, residential electric rates, was up considerably more, by 11.0 percent year-over-year. The component of the CPI for natural gas solely, that is, residential gas rates, was up way more, by 22.7 percent year-over-year.

We haven’t experienced this kind of inflation in a generation.

This time last year, the April 2021 overall CPI was up 4.2 percent year-over-year. The electricity component of the CPI was up considerably less, by 3.6 percent. The natural gas component of the CPI was up 12.1 percent. Gas commodity prices were starting to climb.

Burns & McDonnell – In-depth Understanding for Undergrounding – Read the Blog

The year before, as the pandemic was hitting us, the April 2020 overall CPI was up just 0.3 percent year-over-year. The electricity component was up 0.2 percent. The natural gas component wasn’t up but down 1.9 percent. 

And the year before that, pre-pandemic, the April 2019 overall CPI was up 2.0 percent year-over-year. The electricity component was up 0.6 percent, again much less than the overall CPI. The natural gas component was down again by 1.9 percent. 

When gas commodity prices moderate, hopefully sooner rather than later, residential electric and gas rates should return to their historic trends.