In contrast to the steep decline in the gasoline price index over the past year (which led to a decline in the overall Consumer Price Index), the seasonally adjusted electricity price index hit an all-time high in January, according to data released last week by the Bureau of Labor Statistics.
In January, the seasonally adjusted price index for electricity was 212.290. That was up from 210.489 in December, which was the record up until then. Before that, the high had been the 209.341 recorded in March of last year.
In January, the average price for a kilowatthour (KWH) of electricity also hit an all-time high for that month of the year.
According to BLS, a KWH of electricity cost an average of 13.8 cents in January 2015, which was less than the 14.3-cent cost in June, July and August of 2014 (and 14.1-cent cost of September 2014) but more than the average cost of a KWH in any month—including the summer months—of 2013. In that year, the average price of a KWH peaked at 13.7 cents in the months from June to September.
The price of electricity tends to follow an annual pattern–rising in the spring, peaking in the summer, and declining in the fall.
The rise in the electricity price index ran counter to the gasoline price index, the overall energy price index, and the overall Consumer Price Index, all of which declined in January as well as over the past twelve months.
“The energy index fell 9.7 percent in January, its seventh consecutive decline and the largest 1-month decrease since November 2008,” said the Bureau of Labor Statistics in its press release on the CPI.
“The 18.7-percent decline in the gasoline index was the main factor. (Before seasonal adjustment, gasoline prices fell 17.1 percent in January),” said BLS. “The fuel oil index also fell sharply, declining 9.9 percent after a 7.8-percent decline in December. The index for natural gas, which rose in December, fell 3.4 percent in January. The electricity index was the only major energy component to increase, rising 0.9 percent, its largest increase since May 2014. The electricity index is also the only major energy component to rise over the last 12 months, increasing 2.5 percent over the span. The gasoline and fuel oil indexes have declined sharply over the period, falling 35.4 percent and 29.7 percent, respectively. The index for natural gas has declined slightly over the span, decreasing 0.4 percent.”
“Over the last 12 months, the all items index decreased 0.1 percent before seasonal adjustment,” said BLS.
“The gasoline decrease was overwhelmingly the cause of the decline in the all items index, which would have risen 0.1 percent had the gasoline index been unchanged,” said BLS.
The BLS’s price indexes measure relative change in prices against a baseline of 100. The seasonally adjusted monthly electricity price index exceeded 100 between September and October of 1983, when it rose from 98.9 to 101.0.
Historically, increasing electricity prices have not been inevitable in the United States. From 1913 to 1946, the electricity price index trended down from 45.5 to 26.6. By 1974, it was still only 44.1, which was less than it had been in 1913.
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