Comment by trollbridge
11 hours ago
I spoke with two working class people last week who are facing power shutoffs because they got an unexpected $700 power bill. Not sure if it were a sneaky electricity supplier change or if costs have simply gone up.
But the problem of consumer rates just always ratcheting up needs addressed.
Electricity prices are heavily regulated. The largest increase I can find from a short search is around 20% for some customers in New Jersey. The average year over year increase is closer to 6%
Unexpectedly high electricity bills are almost always from actual usage. Unexpectedly high winter electricity bills are usually from resistive electric heating in one way or another.
You didn’t mention their normal December bill in this exact house, which is an important piece of information.
You are part of the PJM. Read into what the "Fuel Adjustment" actually is. Yes, prices are regulated, but if your area is short of power, they can buy it from the PJM, usually from other sources they own, at "market" rate not regulated rate.
The Fuel Adjustment is the legal loophole difference in the regulated rate vs the market rate. A few scheduled maintenance windows and oh look, we are short power.
Texas is really different, it could be from there.
One of the families mentioned heats their home with natural gas.
I suspect they got slammed with an alternative energy supplier that charges abusively high rates.
With that said, the total cost to the consumer of electricity is 3X what it was 20 years ago, and I am in one of the cheapest markets.
Can I interject regarding resistive heating? I’ve recently added one for my bedroom using home assistant and PID control, 22.5c during day, 18c at night, shuts off when nobody home (radar presence detector should be next step and likely save another 30%). It cost me 150kwh per month in NZ winter (single glazing, but got decent ceiling insulation).
That happens when people are on variable rate or TOU plans, it's very common. "sneaky" may or not be part of it, since ostensibly there's a contract that defines the terms of the electrical service, so it shouldn't be a surprise. But for a lot of folks it's a lot to keep track of, there can be confusing terminology, and yes, some energy retailers are predatory in their plan marketing or contract terms. It's a double edged sword of free market choice in deregulated markets. People that have choices for their energy supply don't always have the time and knowledge to optimize their plan choices and electricity use to get "optimum" pricing. This is why there's pushback in some areas that have had deregulated energy markets to go back to regulated pricing, the "average consumer" isn't seeing the payoff of the free market (even if that is technically "their fault").
I kind of doubt a single surprise bill that happened to arrive in the winter is a TOU plan change.
If someone changes to a TOU plan and their bill shoots up, they’re smart enough to blame the plan change and cite that
Most surprise winter time bills are just excess electric heater usage, such as after the purchase of a couple space heaters without thinking about the overall cost.
> This is why there's pushback in some areas that have had deregulated energy markets
What areas have deregulated residential electricity?
The “optimum” pricing is one that rips off the customer the most. A deregulated free market for utilities doesn’t work because bad actors will find ways to do so through complex contracts.
Prices only go one way. Without inflation, debt has to be repaid in more expensive $'s than it was created in and the whole system goes boom.