Residents in many cities are facing higher utility costs, with the average American paying over $450 in monthly bills, according to a new LendingTree report.
However, the exact amount you pay depends on where you live, and cities in the Northeast saw some of the largest costs.
Why It Matters
Prices for utilities are surging across America, with the most recent consumer price index revealing that electricity prices had grown by 5.5 percent in the 12 months ending July.
What To Know
Utility costs are up 24 percent since 2019, according to LendingTree, with residents in the 50 largest metros paying an average of $453.71 per month.
Northeast cities have some of the highest monthly utility costs, with Boston, New York, Providence and Philadelphia claiming the top four spots.
While Boston had an average cost of $674.97, New York came in a little behind at $635.07. Meanwhile, Providence and Philadelphia residents paid $583.74 and $562.41, respectively.
“The Northeast leads because it’s basically paying the price for being old and cold. These cities are dealing with aging infrastructure that’s incredibly expensive to maintain. Literally heating massive apartment buildings & century-old homes through brutal winters,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek.
“As they renovate these old buildings, these metros get trapped in what I call the ‘efficiency paradox.’ They’re actually becoming some of the most energy-efficient cities in the country. But their utility costs are sky high because they’re subsidizing the massive infrastructure upgrades needed to stay that way.”
On average, households spent an average of 6.3 percent of their median monthly income on utilities.
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “One of the long-term issues for utilities in the Northeastern United States has been a reliance on imported fossil fuels, particularly natural gas. Having to use liquified natural gas to utilize energy sources like electricity can dramatically increase energy costs, especially when those resources surge in pricing. Granted, in our current environment, Americans nationwide are filling the pinch of rising utilities costs, so these rates aren’t a surprise, but they still can be a tremendous strain on the pockets of residents of those states that have to contend with those prices in addition to elevated expenses on many other goods and services.”
Ryan told Newsweek: “When Boston spends millions upgrading a 1920s apartment building with modern heating systems, smart meters, and better insulation. Somebody’s got to pay for that. And it’s not the utility company eating those costs. They’re passing them right along to every customer through higher rates.”
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “The surge comes from two main drivers: heavy demand from new data center development across the corridor, and the massive costs tied to infrastructure upgrades. Add in the four seasons—where winters push energy use higher—and you’ve got a perfect storm, no pun intended.”
What Happens Next
Higher utility bills in certain cities will eat into household budgets and eventually cut back on discretionary spending, Thompson said.
“That matters because when families spend less on restaurants, travel, and consumer goods, it pulls on GDP,” Thompson said. “On the flip side, infrastructure investment and energy production can help offset some of that slowdown. Longer term, it may balance out, but the short-term pain is very real for households.”
The post These Cities Are Paying The Most For Utilities appeared first on Newsweek.
