More than 20 million households are facing a ‘tsunami of shutdowns’ after falling behind on their utility bills as electricity prices soar due to decades-high inflation, forecasters predict. experts.
Since the pre-pandemic era, the amount owed to utility companies has doubled for about one in six households nationwide, according to Bloomberg News.
State governments had imposed moratoriums on utility shutdowns as tens of millions of Americans lost their jobs at the start of the coronavirus pandemic.
But as states lifted lockdowns following the mass vaccination campaign, record levels of inflation have squeezed the economy, driving up the cost of essential goods and services such as electricity , natural gas, fuel and groceries.
Jean Su, senior attorney at the Center for Biological Diversity, told Bloomberg News that soaring utility costs would trigger a “tsunami of shutdowns.”
The latest Consumer Price Index report shows that electricity inflation rose 15.2% in July compared to the same period a year ago.
The cost of electricity rose 1.9% month over month in July.
Last month, the Bureau of Labor Statistics released a report showing that inflation rose to 8.5%, down slightly from 9.1% in June.
Analysts attribute the sharp price increases to tight supplies of natural gas, which is used to generate electricity.
Supply chain disruptions caused by the COVID pandemic as well as the ongoing Russian invasion of Ukraine have put pressure on natural gas markets.
As of midday Thursday, natural gas was trading at around $9.35 per million metric British thermal unit (MMBtu). A year ago at this time, natural gas was less than half the current cost, or $4.26 per MMBtu.
The spike in utility bills comes at an inopportune time as hundreds of millions of Americans have been forced to rely on energy-intensive air conditioning to keep them cool during this summer’s scorching heatwaves.