Energy Costs a Greater Percentage of U.S. Households' Budgets

According to recent reports, U.S. consumers are spending the more on energy bills than they have in decades. On June 29, 2007, the price of crude oil was $70.68 a barrel, the first time in a year that it's been more than $70 according to data from the Energy Information Administration. Electrical companies continue to initiate higher rates every year to pass their increasing costs of doing business on to customers.

The Christian Science Monitor reported that energy bills as a share of income have risen and are now at their highest point since 1987, coming in at $612 billion at an annual rate in the month of April. Energy consumption as a percentage of income is approaching 10 percent for low-income households.

In Connecticut, the Connecticut Light & Power Company proposed a 4.6 percent increase in its distribution rate to take effect January 1. This rate increase could add as much as $7 to the average household's monthly bill. Particularly on top of the rate hikes from previous years, consumers and legislators see the increases as the electric companies compounding the rates.

Like any regressive economic impact, the increasing energy costs hit low-income households the hardest because they have the least amount of cushion. Many electrical companies offer a sliding scale payment plan for low income households, and the Department of Energy recently rolled out its plan for weatherizing grants to make energy efficiency improvements in homes of low-income families.

As the summer progresses, families will turn up the air conditioning and/or fans to keep cool, and appliances will have to work harder. This is particularly true for non-Energy Star appliances. Energy usage is expected to soar and power companies are preparing for brown outs and energy surges. To encourage decreased personal usage and energy conservation, power companies are making direct appeals to consumers to limit their energy usage during the heat of the day.

The Connecticut Light and Power Company and the Department of Public Utility Control have initiated the "Wait ˜Til 8" campaign for the eighth year to ease the burden on the power grid during peak heat. "Wait 'Til 8" encourages customers to avoid using power-hogging appliances such as washer and dryers, dish washers, and air conditioning units until after the hottest hours of the day have passed. This decreases the possibility of an electrical brown-out due to too many demands on the power grid.

Additionally, gasoline prices continue to rise, though they have reached plateau since the Memorial Day Weekend high. According to AAA data, gasoline prices are about $2.96 a gallon nationally, down from the $3.16 per gallon price one month ago.

As energy costs continue to rise personal energy consumption choices will make a difference in consumer's wallets. But like everything else, there is only so much conservation efforts can do.

Sources

Yahoo NewsThe Day

AAA

Dept. of Energy

Connecticut Light & Power Company