Utility Rate Inflation: How Utility Companies are Raising Rates on Rate Payers Over Time
It should come to no small surprise that inflation is more than just American soil, but abroad as well. When we look at Electricity and the Utility companies which hold that electricity unless you pay enormous and ever-increasing rates. These rates are leaving ratepayers feel trapped in paying a monopoly on power. SDG&E wants to raise rates 11%, starting in two years. Calif. Power Rates Go Up 80 Percent.
Both SDG&E (San Diego Gas & Electric) and SCE (Southern California Edison) have raised their rates as much as 80 percent for the top tier of their ratepayers. The average rate increase is 3% or above per year.
Although, “San Diego Gas & Electric filed a request with state regulators late Friday afternoon (Oct2017), asking for an 11 percent rate increase in 2019 and running through 2022.”
This is very disconcerting, as inflation affects many other markets as well; and as power consumption in the U.S. is increasing. We are using more and more gadgets and tools which are tapping into the electricity that we either draw from the grid, or harvest on our own through other means.
The U.S. is far too reliant on energy sources away from our properties, and away from our border. By becoming independent, and essentially, harvesting our own energy, we help our country to gain energy independence from other organizations, or states, which might seek to blackmail, or manipulate us. By increasing our capacity to generate electricity from sun, we can also insulate our country from price fluctuations in global energy markets. — Why Go Solar? — Top 10 Benefits of Solar Energy
As the rates go up, some have sought out other methods of harvesting their power and electricity needs. Solar Energy has become the go to market for unplugging from the grid; or even gaining independence from the grid, while still contributing to the grid. With Solar Panels on your roof, attached to the grid, you can even get paid by the utility company.
What we will look at in this article is effectively why the power companies are raising their rates in historic proportions, what are the options available for homeowners; and how they can save money while becoming independent of the utility companies — essentially “cutting the cord” on the Public Utility Monopoly we see prevalent in SDG&E and SCE’s recent business models.
Utility Rate Inflation is a thing. And yes, even Elon Musk has positioned Solar Energy as the way out of our reliance on the grid. The issue with staying attached to the grid is the blow-back from the utility companies themselves. With the number of Solar PV Installations happening across California, the United States, Europe, & Asia, utility companies are changing their peak rates and times, as well as systematically updating their rates to include much higher rate inflation.
Energy priced at $20 in 2000 → $32.73 in 2017
Prices for Energy, 2000–2017 ($20)
According to the U.S. Bureau of Labor Statistics, prices for energy were 63.67% higher in 2017 versus 2000.Between 2000 and 2017: Energy experienced an average inflation rate of 2.94% per year. This rate of change indicates significant inflation. In other words, energy costing $20 in the year 2000 would cost $32.73 in 2017 for an equivalent purchase. Compared to the overall inflation rate of 2.10% during this same period, inflation for energy was similar.
In the year 2000: Pricing changed by 16.84%, significantly above the average yearly change for energy during the 2000–2017 time period. Compared to inflation for all items in 2000 (3.38%), price inflation for energy was much higher. — in2013dollars.com
“If you wanted to power the entire United States with solar panels, it would take a fairly small corner of Nevada or Texas or Utah; you only need about 100 miles by 100 miles of solar panels to power the entire United States,” Musk said at at the event in Rhode Island. “The batteries you need to store the energy, so you have 24/7 power, is 1 mile by 1 mile. One square-mile.”
It’s “a little square on the U.S. map, and then there’s a little pixel inside there, and that’s the size of the battery park that you need to support that. Real tiny.” — Elon Musk
Musk laid out his vision for renewable energy that relies on storing power from the sun via solar panels — Musk would probably prefer the solar panels are made by Tesla — to fill the enormous demand for energy in the areas of transportation, electricity, and heating.
Currently, about 10 percent of energy in the U.S. is renewable.
How To Get Around Utility Inflation
What does this say about inflation and the Solar Energy market. Well, as rates go up, 3%,4% even 7% yearly, what you will find is that the people who have invested in Solar are going to be paying down their Solar PV System Purchases, and skipping the rate increases. Once Solar PV System homeowners pay off their panels, they are now harvesting their own power, without a payment. And this is where their investment will pay off the most. Especially, if they can get a 12 year financing — like the ones available at Pingo Solar.
Worldwide Inflation Issues
We see inflation occurring throughout the United States, Europe, India. Why are stocks dropping, and inflation rates rising?
The Federal Reserve voted, as Janet Yellen the Chair of the Board of Governors of the Federal Reserve System stepped down and passed her leadership over to Jerome Powell
“I think this initial hand-off from Yellen to Powell is going to go pretty well. He’ll take the baton and run smoothly with it in his first lap,” said Stuart Hoffman, senior economic adviser for PNC Financial Services Group.
