After Pain at the Pump Comes the Electric Shock
Inflation is arriving fast for gas and power bills — and putting great strain on utilities’ return on investment.
Inflation causes special problems for gas and power utilties.
Photographer: David McNew/NewsmakersAmericans are reminded about high gasoline prices daily, every time they drive. Another energy cost comes to their attention monthly: utility bills. These are now also rising, creating an added problem for households, for the president — and, as it happens, for utilities.
Governor Ron DeSantis of Florida recently threw a curveball when he vetoed utility-friendly solar power legislation (see this). Whatever his political calculations, his stated rationale of protecting inflation-addled voters from rising utility bills will resonate. Energy’s share of disposable personal income hit its lowest point ever in April 2020 at just 2.1%,1as Covid-19 swept through. By March of this year, that share had doubled to its highest level since 2014. Rebounding gasoline prices were mostly to blame. But over the past year, the bite taken by electricity and gas bills has begun to expand, too.