US power prices are spiking across the board. But residential buyers are feeling the most pain.
Across the board, US electricity prices have experienced 6% inflation over the past year, which is roughly three times the Fed’s economy-wide target.
But the burden has not been distributed evenly.
Residential electricity buyers are seeing record inflation-adjusted prices, while commercial and industrial buyers are paying below their historical peaks.
What’s going on?
Just how heavy is the load for residential buyers? And how has this relative load changed between these sectors over the 21st century?
The answer is not in power generation costs, which captures an outsized share of attention in this sector.
Instead, the answer has to do with which customers bear the cost of getting electricity from the power plant to the meter.
That distinction is widening, and it has real implications for where residential rates go from here.
You can read my full analysis at Foundations of Energy.
