Electricity Price Surged to All-Time Record for March

April 16, 2014 - 4:05 PM
Electricity plant

(AP Photo)

(CNSNews.com) - The average price for a kilowatthour (KWH) of electricity hit a March record of 13.5 cents, according data released yesterday by the Bureau of Labor Statistics. That was up about 5.5 percent from 12.8 cents per KWH in March 2013.

The relative price of electricity in the United States tends to rise in spring, peak in summer, and decline in fall. Last year, after the price of a KWH averaged 12.8 cents in March, it rose to an all-time high of 13.7 cents in June, July, August and September.

If the prevailing trend holds, the average price of a KWH would hit a new record this summer.

Electricity Price in March

The BLS’s seasonally adjusted electricity price index rose to 209.341 this March, the highest it has ever been, up 10.537 points—or 5.3 percent--from 198.804 in March 2013.

In its press release on the Consumer Price Index, BLS noted that the overall energy index declined in March, driven by declining gasoline and fuel oil indexes, despite increases in natural gas and electricity.

”The energy index fell 0.1 percent in March after a 0.5 percent decline in February,” said BLS. “The gasoline index declined 1.7 percent in March, the same decline as in February. (Before seasonal adjustment, gasoline prices rose 5.1 percent in March).

“The fuel oil index also declined, falling 2.9 percent after rising 4.1 percent the previous month,” said BLS. “In contrast, the index for natural gas rose sharply, increasing 7.5 percent, its largest one-month increase since October 2005. It has increased 15.3 percent over the last three months.

“The electricity index also increased, rising 1.1 percent,” said BLS. ”Over the last 12 months, the energy index has increased 0.4 percent, with the natural gas index rising 16.4 percent, the electricity index increasing 5.3 percent, and the fuel oil index advancing 2.1 percent. These increases more than offset a 4.7 percent decline in the gasoline index.”

Electricity Price Index

Historically, rising electricity prices have not been inevitable in the United States. The BLS’s annual electricity price index—which goes back a century—shows that electricity prices generally declined in the United States between 1913 and the end of World War II.  They then held relatively steady for about two decades before beginning to escalate in the late 1960s.

As CNSNews.com reported in February, per capita electricity production peaked in the United States in 2007.

The business and economic reporting of CNSNews.com is funded in part with a gift made in memory of Dr. Keith C. Wold.