Power Bills Expected to Continue Climbing This Winter

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WSJ Your Money Briefing 7 min 3 speakers 6 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

ReliaQuest Advertiser 0:00
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J.R. Whalen 0:30
Here's your Money Briefing for Wednesday, September 21st.

What are current trends in U.S. electricity and natural-gas bills?

J.R. Whalen 0:38
I'm J.R. Whelan for The Wall Street Journal. Over the past year, consumers have been facing some of their steepest electricity bills in recent memory. Rates are up an average of more than 15%. And as autumn arrives and winter isn't far behind, don't expect much relief from the cost of heating your home or turning on the lights.
Catherine (Katherine) Blunt 0:56
customers should expect to see at least some increase in the amount they're paying for electricity as well as natural gas this winter.
J.R. Whalen 1:03
On today's show, we'll talk with our energy and utilities reporter, Catherine Blunt, about what's driving prices higher and what utility companies are doing to try to keep rates down. That's after the break.
ReliaQuest Advertiser 1:14
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Why have natural-gas prices risen and how does Europe factor in?

ReliaQuest Advertiser 1:39
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J.R. Whalen 1:51
With inflation near 40-year highs, everyone's personal finances have taken a beating so far this year. But experts warn that electricity and natural gas costs could continue rising this winter, putting a tighter squeeze on our ability to make ends meet. So why is that happening, and how can consumers prepare? Catherine Blunt covers utilities and the energy sector for the WSJ, and she joins us with more. Hey Catherine, thanks so much for being here.
Catherine (Katherine) Blunt 2:14
Thank you for having me.
J.R. Whalen 2:15
You know, Catherine, it seems every day we open the mail and our bills keep going higher and higher. The government said electricity in August climbed 15.8% over the same month a year ago, and it was the biggest 12-month increase since 1981. What's going on here?
Catherine (Katherine) Blunt 2:30
Yeah, so the primary challenge is that natural gas prices have risen very significantly in the last year. This is largely as a result of a few different things, but most significantly, perhaps, the situation in Europe. Europe has been working very hard to reduce its reliance on Russian supplies, and we have been exporting more gas abroad as a result. We've also seen a run-up in the cost of fuels used to produce electricity other than natural gas, including oil and coal. And so really it's a problem with fuel costs across the board.

If the U.S. has ample gas, why hasn't supply lowered prices?

J.R. Whalen 3:02
You mentioned that natural gas is a big factor here, but you've been with us before talking about how natural gas is plentiful in the U.S. Wouldn't that supply help to bring electricity bills down?
Catherine (Katherine) Blunt 3:12
Yeah, so supplies haven't been as abundant lately. Shale producers went through a pretty tough period in which they weren't producing the sorts of returns that Wall Street wanted to see. So they scaled back on that production. And now, even as demand has ramped up so significantly, many of them have had a problem responding as quickly as needed to shore up some of the supplies. And at the same time, as I mentioned, we are sending more gas abroad to help alleviate the situation further. in Europe. So that's creating a pretty tight market here for natural gas.
J.R. Whalen 3:42
Okay, but are these higher prices being seen everywhere? Where in the U.S. are people seeing electricity bills rise the most?
Catherine (Katherine) Blunt 3:48
Yeah, so to some extent these challenges are being felt everywhere, but not to the same degree.

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