In some countries, electricity is a luxury. Reliability is not at all guaranteed, and it ain’t cheap. Not so in America! Or at least, it hasn’t typically been the case here. But now? Things seem to be going downhill fast.
Some will argue it’s due to climate change, but that’s a hot take that we’ll save for another article. Instead, let’s just look at the facts that are driving things right now.
Here are Five Fast Facts on worse electricity for more money in America:
- ⚡ Basic Economics - Like any resource, it’s all about supply and demand. In modern America, demand for electricity is skyrocketing, and our aging systems aren’t keeping up! Seventeen large utility companies have or will raise rates by 4.4% – well above inflation – between 2022 and 2027. Between 2013 and 2022, there was a 20% increase in power outage frequency and a 46% increase in outage duration. Just think how great it will be once the government-mandated EV requirements kick in!
- 👉👈 Shifting Responsibilities - Part of the problem is how the utility playing field has shifted over the years. When the national electrical grid was first established, it was governed by local entities with direct responsibility for keeping things running smoothly. Starting in the 1990s, a process of deregulation and privatization began, but it hasn’t delivered the better quality for lower cost that was promised. It is now run by a mishmash of entities that are more interested in profit than reliability.
- 🦹 Bad Actors - This has led to some very horrible results. Take Enron, for example. In the early 2000s they created an artificial energy shortage to spike prices. This caused massive blackouts for millions of people. Other tales of bribery and corruption abound. Big money and politics? How could there not be corruption?
- 🧓 Where We Are - Today too many Americans are faced with things like 70% of our power lines being well past their expected lifespans, and rolling power outages to prevent even more catastrophic failures. Not sure how small failures prevent big failures, but that’s what they tell us, so it must be true…
- 📈 Ramping Up - Utilities are gearing up for big spending on upgrades, replacements, and maintenance. In the next two years, it’s expected they will spend more than $165 billion across the nation. And YOU get to pay for it, you lucky duck you!
🔥Bottom line: Look, pretty much everyone agrees that we desperately need to upgrade the electricity infrastructure and power grid. Let’s not even think about the national security risks we currently have because it’s an old and inadequate system! But the complicated mess of responsibility and layers of administration means it’s a jungle of local, state, and regional authorities – many of whom are elected – who have to sign off on price hikes for customers (i.e. voters). This makes it tough to get anything done at all, and certainly without huge cost increases. So…while we hope these projects bring more reliable energy for all, it’s almost certain that we’ll all be paying more for it over the coming years.
What do you think of all this?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
BTW, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
