Like the cost of many things in 2022, energy prices have gone up, too. While some upward price creep is normal and to be expected, the U.S. Energy Information Administration forecasts that the average residential electricity costs are going to continue to rise through Fall 2022, and will likely have jumped 7.5% by year's end – a much greater jump than 2021's 4.5% and the 1.1% over both 2020 and 2019.
We've previously outlined the current causes behind inflated energy costs. The main reason is the disruption of the global energy market due to the ongoing war in Ukraine. As numerous European nations show their stance against Russia by buying natural gas and oil from elsewhere, U.S. energy companies are meeting their demand by exporting more natural gas and oil, leaving a shorter supply domestically. Because roughly 35% – 45% of U.S. electricity is produced from natural gas, higher oil and gas prices are translating into higher electricity costs.
Regardless of the full spectrum of reasons behind rising energy prices, the fact remains: the cost increases are going to be taking a bigger bite out of your budget. However, there are several things you can do to help offset the rising electricity costs.
1. Save green by getting greener.
The first thing you can try to do is use less energy. Your monthly electricity bill is tied to consumption, so the less you use, the less you pay.
A smart first step is to conduct a home energy audit which analyzes your household electricity usage to reveal all the areas where you can potentially find electricity savings. Wasteful habits, like leaving lights on or devices plugged in when not needed, are a big one. Strategic control of your thermostat for more efficient heating and cooling of your home is another huge area for savings. In fact, you can check out our blog post on 8 electricity-saving moves to reduce your carbon footprint for more tips.
2. Lock in a fixed-rate contract.
If you're afraid of commitment, it could be costing you!
That is, if you're still on a month-to-month variable plan with your electricity provider, you're likely paying for a higher, fluctuating market-rate price for your electricity than you would be if you committed to a fixed-rate contract over the long term – typically 6, 12, or 24 months.
Learn more about the ins and outs of fixed versus variable-rate plans here.
3. Switch to a better-priced provider.
If you are already on a fixed-rate plan with your electricity provider, check to see when your contract is set to expire. (It's also prudent to double-check what happens when your contract expires – will your rate increase? Will you automatically transition into a month-to-month plan? Will your power get shut off?) If it's set to expire soon, say, in the next few months, it's time to start shopping around. This is one of the best times to potentially lower your electricity rate.
For consumers living in deregulated regions of the country (also known as "Energy Choice" areas), energy providers are competing to get your business and will often offer very attractive introductory rates to win you over.
Finding the best electricity rate for your household is easy – simply plug in your zip code in our free Electricity Comparison tool above and we'll show you all the energy providers and the plans they offer so that you can compare for yourself who offers you the greatest electricity savings.
Take control of your energy costs.
The temps may be dropping around the country as we head into fall, but, unfortunately, according to the EIA's outlook, electricity costs won't be dropping anytime soon. Do yourself – and your wallet a favor – by making your home as energy efficient as possible, getting yourself on a more affordably priced fixed-rate plan, and taking advantage of any low, introductory rate offers you may be eligible for in your area.