Electricity costs across the U.S. are making their biggest jumps since the last major economic downturn.
Despite pushing to build more renewable energy sources over the last decade, fossil fuels still buoy most of our electricity generation. All the voltage required to keep our lights and appliances powered daily has to come from somewhere—and 60% of that electricity in the U.S. comes from plants that turn petroleum, coal, and natural gas into power. While America has, to a large degree, mitigated its reliance on petroleum, natural gas and coal together account for all but 0.7% of all fossil fuel-based electricity generation.
A shortage of natural gas around the globe is pushing the prices to record levels. Of course, utility providers are passing that cost increase on to their consumers—the average American owner or renter. The ongoing war in Ukraine has also created a battle of resources, as Russia has revoked allied countries' access to its oil and natural gas resources. The war reached a possible fracture as Russian President Vladimir Putin annexed four Ukrainian regions and made unsubtle hints at nuclear retaliation should NATO nations attempt to intercede.
Russia is the second largest producer of natural gas in the world. However, unlike the U.S., Russia's largest oil and gas producers are controlled by the state, meaning the industry can be manipulated and weaponized by its government. In the last two decades, the U.S., particularly Texas, tripled down on natural gas production through innovative new extraction techniques known as "fracking."
Even with the elevated U.S. natural gas production over the last 10 years, the global shortage combined with the Biden administration's decision to export more fossil fuel is pinching markets and driving prices up.
A Bank of America data analysis released in September 2022 found households with incomes below $150,000 per year have experienced the most significant increases in their utility bills this year. While gas prices have risen, their rise doesn't compare to that of electricity costs, which also differ among states—each of which is home to an energy industry that uses different combinations of renewable energy sources and fossil fuels to power homes.
OhmConnect analyzed data from the Energy Information Administration to examine the rising cost of residential electricity in the U.S. and how it varies across states.