March 2023: Enersection Residential Energy Index
Continued but moderating energy cost deflation
Using average annual volumes and monthly pricing data, Enersection has created a monthly index tracking average 'Energy Costs' for US households - effectively how much does it cost to heat and power your home and fuel your car
The index suggests Residential Energy Costs are down 26% since peaking in June 2022 and now down 11% versus a year ago
The average U.S. household is theoretically saving $1,600/year versus peak energy costs
Unfortunately, the bad news is the trailing 12-month index is just starting to turn lower
Although energy prices have come down in recent months, lower prices will take time to work their way into consumers pockets
Monthly Index
Enersection's Residential Energy Index suggests annual residential energy costs in the U.S. are at $5,555 per year on a trailing basis.
Spot prices have peaked and fallen significantly, but U.S. consumers remain on the tail end of the most expensive energy costs of their lifetimes.
The spot index is down 11% year-over-year.
Retail gasoline costs are currently in-line with oil costs. Â Crack spread expansions post-2020 is visible.
Residential gas delivered by LDCs has seen the average U.S. price drop by 45% in four months, tracking the natural gas price cliff dive.
With natural gas prices driving the marginal price of power in much of the U.S., correlation with power prices is tight so like residential gas deliveries, power prices are following natural gas lower.
Spot prices have moved lower, while trailing prices have remained stubborn. Â Consumers should begin to see outright energy bill deflation as recent commodity price movements make their way through the system.
