US utility rates increases soared in 2023. This year could see more of the same
(Credit: Steve Snodgrass / Creative Commons)
Utilities in the US are on pace to raise electricity rates by around $9 billion in 2024, nearly reaching the modern record for net rate increases set a year prior, according to data from S&P Global Market Intelligence.
Net electricity rate increases reached $9.7 billion in 2023, more than double the $4.4 billion authorised by regulators in 2022. Two California utilities — Pacific Gas & Electric and Southern California Edison — accounted for over a third of the net increase in 2023, largely due to wildfire mitigation investments like the undergrounding of power lines and vegetation management.
It’s important to note, however, that residential electricity bills increased by only 2% in 2023 while the inflation rate was 4.1%.
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Based on projections, regulators could authorise around $8.9 billion in rate increases in 2024.
In Illinois, regulators authorised a $759 million rate increase to ComEd for grid infrastructure development necessary to comply with the Illinois Climate and Equitable Jobs Act (CEJA), Public Act 102-0662, goal to transition to 100% clean energy by 2050. The law is intended to encourage increased electrification and adoption of electric vehicles, which is expected to double electricity use by 2050.
The New York Public Service Commission authorised a $442 million rate increase to Consolidated Edison for investment to prepare the electric system for more frequent and severe weather events and meet the state’s goals of generating 70% of electricity from renewable sources by 2030 and reaching zero emissions from the statewide electrical demand system in 2040.
Duke Energy Carolinas was granted a $436 million rate increase by the North Carolina Utilities Commission to cover current and planned system investments to enable the delivery of progressively cleaner energy to achieve carbon neutrality by 2050.
The increase also covers uncollected debts incurred during the COVID-19 pandemic, updates to depreciation rates for sub-critical coal plants, the implementation of customer service programs, storm costs and costs of compliance with the requirements of the Inflation Reduction Act of 2022.
Originally published by John Engel on power-grid.com.
