Most Americans should expect to pay more for their electric bills and other utilities this summer. June's heat wave has plunged over 100 million Americans into extreme heat, according to the National Integrated Heat Health Information System (NIHHIS). From April 2021 to April 2024, electric prices have increased by 24%, and you’ve no doubt been feeling the strain on your wallet. Here's a look at what's causing this rise in energy prices and what you can do to save money.
Where are electric bills rising the most?
The Mid-Atlantic, Pacific and Eastern South will see the greatest monthly increases in electric bills, according to a recent report from the U.S. Energy Information Administration (EIA). Although New England and West South Central states will see declines in their monthly electric bills, they will still pay over the national average.
Why are energy prices rising?
Increased costs are due to several factors, including increased demand, especially among energy-intensive data centers. Electricity consumption is expected to grow 4.7% in the next five years, up from the 2022 forecast of 2.6%. “Data centers whose chips run artificial intelligence are especially energy-intensive, and more are coming,” Jim Patterson writes in the Kiplinger Letter. “Data centers in general account for 4.6% of demand. By 2026, that figure stands to rise to 6%.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
He also shares that increased construction of high-tech manufacturing facilities, appliances switching from natural gas to electricity and more electric vehicles are also driving up electricity consumption. But along with this increased demand comes supply constraints. And this all results in higher rates on electric bills.
“How much higher depends on a lot of factors, such as your region, the price of natural gas (the leading fuel source for generation) and how quickly government officials try to ramp up renewable power,” Patterson writes.
2024 to be one of the hottest summers ever
This summer's heat waves will surely cause you to crank up your air conditioning and, in turn, your power bill. The more energy you use to combat those roasting temperatures, the more money you’ll inevitably spend.
From June through August, temperatures are expected to reach 2 degrees above historical averages across more than half of the country, Accuweather notes. Experts believe that there’s a good chance this summer could be one of the hottest on record in the U.S., especially from the Rockies to the East Coast.
“We expect electricity consumption will grow in all major consuming sectors this year, but especially in the residential sector, which we expect will increase by 4%” reports the U.S. Energy Information Administration in the March edition of its Short Term Energy Outlook. “Much of the forecast year-over-year growth in residential electricity occurs during the summer months of 2024.”
How to cut your electric bill summer 2024
While you can't directly control how much your electricity costs, you can control how much you use. One of the best ways to save on energy bills, and also one of the easiest, is to keep your thermostat at the right temperature. According to the U.S. Department of Energy (DOE), the smaller the difference between indoor and outdoor temperatures, the lower your overall cooling bill will be.
They recommend keeping your thermostat set to 78 degrees in the summer months while you're at home, and even higher while you're away. You can easily control the temperature in your home by opting for a smart thermostat. "Programmable thermostats will avoid any discomfort by returning temperatures to normal before you wake or return home," states the DOE.
This is also a great time to invest in more efficient heating and cooling systems, like a heat pump. There's solid evidence that a heat pump will help most people save money over standard air conditioning.
There are a few other ways to stay cool this summer. Check out our 12 tips to stay cool without air conditioning, which include maximizing shade in your home, prioritizing good insulation and properly using fans to beat the heat. Did you know your fan should rotate in a different direction depending on the season? Particularly, counterclockwise in the summer months? By reading the article, you'll find more information on how to save money — and not sweat to death in those record-setting temperatures.
Related Content
-
Understanding Your Financial Belief SystemIf we can disconnect from our past beliefs and assess our current situation with a certain level of objectivity, we can make more appropriate decisions.
-
Why This Economist Thinks the Fed Is Already Late to Cut RatesMoody's Analytics chief economist Mark Zandi talks to Kiplinger about what he thinks the Federal Reserve is getting wrong on inflation.
-
Why This Economist Thinks the Fed Is Already Late to Cut Rates
Moody's Analytics chief economist Mark Zandi talks to Kiplinger about what he thinks the Federal Reserve is getting wrong on inflation.
-
Tech Outage: How to Get Reimbursed if Your Flight Was Canceled or DelayedDid the global Microsoft outage disrupt your travel plans? Here's how to get reimbursed if your flight was canceled or delayed.
-
How the Tech Outage Impacted Banks and FinancesA major tech outage that caused chaos at airports also impacted banking and finance.
-
Get Your Starbucks $3 Drink TodayStarbucks $3 Drink specials are available this Friday only, July 19, from 12 to 6 p.m.
-
After Amazon Prime Day: The 25 Best Deals Still Going OnIf you missed out on Amazon Prime Day, no worries. There are dozens of "too-good-to-miss" Post-Prime Day deals to cash in on, from Moen, Keurig, Apple, Ninja, Levis and more.
-
Amazon Prime Day Southwest Deal: 30% Off Domestic FlightsAmazon Prime Day Southwest Deal: 30% Off Domestic Flights
-
Amazon Prime Day: Best Deals Under $50Get the best Amazon Prime Day deals under $50 before they sell out.
-
Save Money on Your Energy Bills with These Amazon Prime Day DealsAmazon Prime Day is prime time to get great deals on energy efficient devices and appliances.
