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Extreme Energy Prices in New England Represent a Worrying New Trend

Marta Gintowt
September 22, 2022

Electricity prices rise 4x more than predicted

This summer, the buzz throughout most of the media was that energy prices are rising and everyday consumers are feeling the pressure. With inflation reminding residents of its presence at every turn, from gas prices to food prices, this summer was difficult for all.

Energy prices for household utilities can change from state to state, depending on various factors such as kilowatt hours charged and price per unit, the state of affairs when it comes to utilities, and other economic conditions, and New England seems to have suffered the most when it comes to difference in utility prices this summer.

It was predicted last year in New England that the average electricity bill for homes would go up 11% in the summer of 2022 (while the US average increase was expected to be at just 7%), and the EIA stated that prices could reach $100 per megawatt hour, with a monthly average household bill to amount to $165. Unfortunately for residents, the reality of the price situation far exceeded the estimated increase.

In fact, in some states like Maine, that increase was 46%, about 4 times more than the predicted 11%. Additionally, other states across New England have experienced painful price increases, with Massachusetts experiencing a 13% increase, Connecticut with a 22% increase, New Hampshire with an 18% increase, Rhode Island with a 19% increase, Vermont with a 5% increase, and New York, although not in New England, experienced a significant increase with 14%.

Source: EIA Electric Power Monthly

According to the US Bureau of Labor Statistics, households in Boston, the largest city in the region, experienced higher electricity prices this June, paying an average of 61% more for electricity than the rest of the United States. This is an exorbitant increase, however, it seems that there has been a trend for some time that the region has always paid more when it comes to utilities, an average sometimes reaching 57% more throughout the last 5 years. What does this mean for residents in New England? Will this upward trend in pricing go on forever? When will residents get relief when it comes to their electric bills?

Source: US Bureau of Labor Statistics

From graphs created by EIA, shown below, the forecasted energy prices are predicted to be even higher in the summer of 2023 throughout the United States. For many residents, paying steep prices for power isn’t an option, and we can see from many other countries with energy crises, such as Spain, that some people have to make very difficult decisions when it comes to their electricity in the midst of extreme temperatures, that are only getting worse as the years go on.

Source: EIA Short-Term Energy Outlook

Prices aren't coming down any time soon

Dependence on the electric grid and fossil fuels, particularly natural gas, have resulted in higher prices for New Englanders and others across the country, and the burden can really be felt when bills steadily increase with no plausible end in sight. In an article by WBUR, the global natural gas crisis is to blame for these high prices in New England, as the area is geographically not in any advantage of being close to gas reserves, while much of the liquid natural gas is being exported oversees. Secondly, the article states that utility logistics are quite complicated and intricate throughout New England, where there could be a big difference in price and electricity providers within one state.

Seems very complicated, doesn’t it?

When utility companies aren’t delivering a promising, stable service with prices that are affordable to customers, other options should be more readily available. Not only is paying high prices for electricity unsustainable over time, the fluctuations can cause fatigue and stress among customers, not knowing when the next time a price raise in billing will happen.

As the grid gets weaker energy pricing projections continue to rise, off-grid options like OhmGrid become much more enticing, as pricing is locked-in at the flat rate you agree to when signing up, protecting consumers from price hikes long-term. With stable power and billing, going off-grid with OhmGrid is the best way to circumvent further energy instability in the future.

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