Electricity Prices Expected to Spike This Summer
Several factors are contributing to the hike in energy prices across the board June 23, 2022
Facility managers, fresh off an expensive winter due to natural gas prices that were double and sometimes triple what they were just a year ago, can expect a similar spike in electricity prices this summer.
According to Energy Information Administration, March 2022 average U.S. commercial electricity prices are up to 11.77 per kilowatt hour, a rise from 11.17 in March 2021. That rise may not seem significant but data is lagging behind and several factors are expected to contribute to a more significant rise this summer.
The biggest reason, according to the New York Times, is the continued high cost of natural gas due to the war in Ukraine. Natural gas-fired power plants now account for 40 percent of the U.S. electricity generation.
Another factor is demand. Rising temperatures due to climate change – and this summer is expected to be another hot one -- mean more demand for air conditioning, and thus higher prices across the board.
The good news is that in states where a larger percentage of electricity is generated from renewables like solar and wind, the rise in electricity price won’t be as steep, say experts.
Greg Zimmerman is senior contributing editor for FacilitiesNet.com and Building Operating Management magazine.