Electric Bills Down to 1.37 Percent

Deck: 

For ten straight months, electricity 1.5 percent or less of consumer expenditures

Today in Fortnightly

The Commerce Department last week reported the gross domestic product. A major component of the GDP is personal consumption expenditures, what is spent by American households on all goods and services. Plus what is spent on their behalf, by insurance companies for example.

A tiny slice of consumer expenditures is our electric bills. How tiny? In December 2015, just 1.37 percent of expenditures were to pay for electricity. 

In other words, one dollar of every 73 dollars of expenditures covers electricity. That leaves 72 of every 73 dollars to purchase other goods and services.

The electricity slice of expenditures in December wasn't the lowest in 2015, though the second lowest. More importantly, for ten straight months now, the slice has been 1.5 percent or lower. 

Since the Commerce Department started reporting monthly consumer expenditures in January 1959, last December had the eleventh lowest electricity slice of expenditures. This means, over the course of 57 years, over the course of 684 months, 10 months had a lower slice than December and 673 months had a higher slice.

The all-time record low was fairly recent, July 2014. In that month, electricity was extraordinarily inexpensive. Just 1.3 percent of consumer expenditures went to pay for electricity. Last December was only five percent above the record low. 

Note that the Commerce Department counts the payment of electric bills. There is naturally a gap of a couple of months between the metering of electricity usage, which is typically highest during the summer months, and the payment of electric bills.

The only other month in history in which the electricity slice fell below 1.34 percent was August 2004. So for all but two months in the last 57 years, the electricity slice was either very slightly below that of last December or it was above, sometimes by a substantial margin.

In 1981, the all-time record high was set in June of that year. The electricity slice got up to 2.53 percent. That's 1.8 times greater than the electricity slice of last December. Electricity is far cheaper than in 1981.

Each month, Public Utilities Fortnightly takes the reports of the alphabet soup of EIA, BEA, Census/HUD and BLS and breaks them down for their implications, for those of us in the business of electric and gas utility regulation and policy.


Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
E-mail me: mitnick@fortnightly.com