Surging electricity bills likely stunned many Americans this summer, but maybe they shouldn’t have: The cost of electricity has been trending upward since 2020, according to an analysis of data from the U.S. Energy and Information Administration (E.I.A.). For at least 20 percent of U.S. households, the increases have likely been financially burdensome.
Experts recommend that households spend no more than 8 to 10 percent of income on all utilities, while the U.S. Department of Energy considers households that pay more than 6 percent of income on energy to be “energy burdened.” Recently released E.I.A. data shows that the average residential electric bill in the month of July was $204 — 4 percent of the 2024 monthly median household income, according to the latest census data. This leaves households with roughly 2 to 6 percent of their income for other utilities, such as gas, oil and water.
Consider that an estimated 19 percent of American households earn less than $30,000, making them especially vulnerable to rising energy costs. For them, a $204 electric bill instantly becomes a financial burden.
Each state has unique energy needs, with a variety of factors contributing to costs. But common factors include rising supplier rates, consumer demand, regional regulations and a lag in clean-energy solutions. One major contributor is the growth of A.I. data centers, which use a huge amount of electricity to power nonstop computing. Energy providers have responded by seeking more energy at higher prices and transferring the costs to consumers.
In July — peak air-conditioner season — electric bills across the South took the biggest bites out of household incomes, sapping more than 4 percent of the monthly median income in Alabama, Mississippi and Louisiana.
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