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Why Does Your Electric Bill Get More Expensive?

Posted on: September 10th, 2019

Have you ever opened your electricity bill and wondered, “why is this so much higher than last month?”
I’m here to answer that question. There are four main contributors to the bills you receive. Fuels,
Infrastructure (power plants, transmission lines, etc.), Weather Conditions, and Regulations. In some
parts of the country, your bill can also be affected by “peak demand” charges, which means you get
charged a higher rate when demand is at its highest, or “peaks”, like the late afternoon. So, if fuel prices
go up or down if your community is expanding and infrastructure needs to be built, if there are any
extreme weather events (including extreme heat or cold), or if regulations become stricter or are rolled
back, your bill could go up or down month to month. The Federal Energy Regulatory Commission
oversees all of this and ensures that utilities that maintain and build the grid are have to adhere to their
standards. In return, these companies are often federally subsidized, with profits guaranteed to ensure
the companies don’t go out of business, which would result in American citizens going without power.

What all this means is that your bill is made up of a complicated set of circumstances, well beyond your
control, that is guaranteed to get more expensive as time goes on. Fuels are limited, therefore at a
certain point, they will be gone. Our population and infrastructure are always growing. Analysts agree
that heavier regulation is more likely than continued rollbacks (voters also want this). And of course,
the weather is to be getting more and more devastating, setting records in 2018. This information paints a
pretty bleak picture of the future of our energy bill.

These factors, along with the way utilities are regulated in America, are guaranteeing the “why is my bill
higher this month” surprises keep coming. In the United States, the average bill has gone up 4% annually
over the past 10 years. In Ohio, bills have gone up about 3% each year. The projections are even scarier,
with some estimating that the natural gas boom will slow, resulting in rate increases over 4% annually
through 2050. How do you avoid these higher rates? The answer is simply: you can’t. To avoid paying
double or even triple what you are paying now, you have to either use less or find a way to produce it
yourself. That is where solar photovoltaic (solar PV) installs come into play. Solar on your home or
business with save you tens of thousands, if not hundreds of thousands of dollars, with plenty of other
benefits including decreasing carbon footprints and increasing property values. So to avoid these
horrible surprises, be sure to make the switch to a residential solar PV system and purchase energy-efficient products whenever possible.