Is the Pandemic Really to Blame for Your High Utility Bills?
Time at home increased in 2020, and so did the price we pay for utilities. Is this simple cause and effect, or is there something more at play?
Since the onset of the global pandemic, many people have seen a rise in their utility bills. According to one recent report, 39 percent of people worldwide say their utility bills are up since COVID-19 quarantining began.
It would be tempting to pin any increases you’ve seen directly on COVID-19. But in truth, there are likely other factors at play. Read on for a clearer picture of the increases you may be experiencing, and learn some tips to counteract them.
First: Is Utility Consumption Really Up?
Pre-pandemic, people typically used more electricity in the morning as they went about their AM routines and less during work and school hours when they usually weren’t home. Now it’s steadily rising throughout the day, ultimately leading to utility bill sticker shock for some families. The U.S. Energy Information Administration’s (EIA) short-term energy outlook backs that up. Data forecasts show that residential electricity sales will increase by 2.5 percent this year.
Residential natural gas consumption, however, is a different story. According to the U.S. Energy Information Administration’s (EIA) short-term energy outlook, demand nationwide is actually expected to be slightly lower in 2020 than it was in 2019. So far, the EIA reports that residential use is averaging 13.2 billion cubic feet per day (Bcf/d) compared to 13.8 Bcf/d last year, down 0.6 Bcf/d.
Utility Consumption vs. Costs
Of course, using more and paying more are different things. As a consumer, you may be most concerned about that second part. Know this: Prices this year have increased for electricity and natural gas.
The price of electricity is now .7 percent higher per kilowatt hour than the average price in 2019. Natural gas went from $10.46 per thousand cubic feet in 2019 to $10.59, partly because production is down by two percent this year and is expected to remain low throughout the winter. Lower supply means increased prices, which utility companies routinely pass on to the consumer.
Other Utility Bill Factors
Averages paint the broad picture. But when it comes down to it, there are key local influences informing your utility bill.
It’s all pretty logical: A household of one person with a full-time non-remote job probably won’t have the same utility drain as a family of five with parents and kids working and schooling from home. Similarly, people who live in one-bedroom apartments probably won’t be spending as much as those who live in five-bedroom houses with vaulted ceilings.
Habits matter, too. Taking long, hot showers, or cranking up the heat instead of putting on a sweater, will cause an uptick in usage.
Where You Live
Though prices are up overall, specifics vary greatly depending on where you live. Case in point: Illinois, where the cost of residential electricity was actually slightly lower in August 2020 than in August 2019, thanks in part to at least one utility company receiving approval from the Illinois Commerce Commission to lower power-delivery surcharges.
Local variability also depends on things like proximity to power plants and natural gas pipelines, taxes, state and local regulations and the availability of fuel. The cost of electricity in Hawaii, for example, is significantly higher than the cost in many other states. Why? Because in Hawaii the majority of electricity is produced by petroleum. In most other states it primarily comes from natural gas and coal, which isn’t as expensive.
According to the National Oceanic and Atmospheric Administration, 2020 has been remarkably hot, on track to become the second hottest year on record. Natural gas is primarily responsible for home heating. Given the warm temps, heaters aren’t being used as much this year in some places, lowering bills despite higher prices.
On the flip side, if you have air conditioning, you may have run it more frequently this year, leading to a higher electric bill. And if your home has electric heat, with or without A/C, that’s another factor.
How To Lower Utility Bills
The news that cost (and for some, usage) is up probably isn’t the best news, especially if you’re among the millions struggling financially. The Bureau of Labor and Statistics reports a 6.9 percent unemployment rate in October 2020. However, there are a few ways to lessen the blow.
- Be proactive. Don’t let these rising costs take you by surprise. Contact your utility company and find out whether a price increase is on the docket. If it is, find out the percentage of the increase so you can plan ahead.
- Check monthly usage. Pay attention to your monthly electricity and natural gas usage. Your monthly statement should include these details. You can also log in to your account online to compare your usage across months and even years. If it’s higher than you’d like, try making small changes, like lowering your thermostat by a degree or two or taking shorter showers. When taken together, these really can help.
- Call the company. If you are having trouble paying your bill, speak up. Call your utility company and ask whether they have a customer assistance program. Many offer short-term extensions or payment plans. They can also connect you to other helpful resources and/or provide advice on how to lower your bills.
- Get help. Apply for local, state or federal bill-paying assistance programs. The Low Income Home Energy Assistance Program, not only helps low-income households offset the costs of utility bills, but also helps recipients with the costs of weatherization.