By: Alexa Austin
The Energy Information Administration (the “EIA”) recently released its Summer 2022 Short-Term Energy Outlook report warning consumers of higher electricity prices for the summer.[1] The EIA is forecasting that household electricity prices will rise 4 percent this year compared to 2021.[2] States such as Hawaii, Louisiana, New York and Florida have already seen their electricity rates increase over 15 percent this year.[3] Electricity consumers in Pennsylvania have seen a price spike of 8 percent over the last year.[4] These increases are showing no signs of stopping.
American consumers have already seen a spike in energy prices this year due to war in Ukraine.[5] On top of the ongoing energy uncertainty from the war between Russia and Ukraine, the climate crisis has caused and continues to cause massive disruptions to the power grid through wildfires, heat, and flooding.[6] The Federal Energy Regulatory Commission (“FERC”) released its strategic plan from the financial year 2022-2026 which includes significant modernization of the electricity market and a safeguarding of electric infrastructure to protect the grid from disruptions caused by global warming.[7]
Indeed, one of the Biden Administration’s most ambitious goals is to strengthen the electric grid to reduce power outages and ultimately lower energy bills for Americans.[8] It aims to shift to more sustainable renewable energy sources such as solar and wind.[9] The Investment and Jobs Act, signed into law in November 2021, included $65 billion for upgrading the electric grid.[10] This is a long overdue investment, and only inches at stopping the catastrophic blackouts and uncertainty in the grid caused by climate change.[11] However, this does not address the immediate concerns of Americans heading into the summer any massive changes to the grid are likely to take more time. In the meantime, consumers will struggle to pay high electric bills due to constraints in natural gas and grid uncertainty.
To address immediate concerns the Biden Administration has urged the energy industry to produce more oil and gas[12], but this has not come to fruition yet.[13] It is uncontested that right now the U.S. relies on fossil fuels to meet its energy needs – but the current crisis in Ukraine along with the devastating impacts show the need to move quicker to a cleaner, more efficient grid system that is less reliant on one source of energy. The current crisis has only further revealed how a failure to reduce dependence on fossil fuels has left the U.S., and frankly, the world, vulnerable to geopolitical events.
Consumers should not bear the brunt of political leaders and energy companies’ failures to ensure a more efficient and reliable grid. Especially heading into the summer, where demand for energy is already higher, political leaders, regulators, and energy companies should work to ensure that astronomical rates do not plague consumers this summer.
[1] U.S. Department of Energy, Energy Information Administration, Short-Term Energy Outlook: Summer 2022 Electricity Industry Outlook (May 5, 2022), eia.gov https://www.eia.gov/outlooks/steo/special/summer/2022 _summer_electricity.pdf
[2] Id.
[3] Id.
[4] Id.
[5] See Clifford Krauss & Stanley Reed, Russia’s Moves in Ukraine Unsettle Energy Companies and Prices (Feb. 22, 2022), The New York Times, https://www.nytimes.com/2022/02/22/business/energy-environment/russia-ukraine-oil-gas.html
[6] See Brad Plumer & Ivan Penn, Climate Crisis Catches Power Companies Unprepared (Aug. 6, 2021), the New York Times, https://www.nytimes.com/2021/07/29/climate/electric-utilities-climate-change.html?action=click&module =RelatedLinks&pgtype=Article; Josh Lederman, How One Texas Storm Exposed an Energy Grid Unprepared for Climate Change (Feb. 17, 2021 2:00 PM EST) https://www.nbcnews.com/science/environment/one-texas-storm-exposed-energy-grid-unprepared-climate-change-rcna289.
[7] Federal Energy Regulatory Commission, Fact Sheet | Strategic Plan FY 2022-2026 (Mar. 31, 2022), FERC.gov §
[8] U.S. Department of Energy, Reimagining and Rebuilding America’s Energy Grid (June 10, 2021) energy.gov https://www.energy.gov/articles/reimagining-and-rebuilding-americas-energy-grid
[9] Id.
[10] The White House, Fact Sheet: The Bipartisan Infrastructure Deal (Nov. 6, 2021), wh.gov, https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/
[11] Josh Lederman, How one Texas storm exposed an energy grid unprepared for climate change (Feb. 17, 2021 6:00 AM EST), nbcnews.com, https://www.nbcnews.com/science/environment/one-texas-storm-exposed-energy-grid-unprepared-climate-change-rcna289
[12] The White House, FACT SHEET: President Biden’s Plan to Respond to Putin’s Price Hike at the Pump (Mar. 31, 2022), wh.gov, https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/31/fact-sheet-president-bidens-plan-to-respond-to-putins-price-hike-at-the-pump/.
[13] Clifford Krauss, Why U.S. Oil Companies Aren’t Riding to Europe’s Rescue (April 27, 2022), The New York Times https://www.nytimes.com/2022/04/26/business/energy-environment/oil-us-europe-russia.html.