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 27% since peaking in June 2022 and down 18% versus a year ago
The average U.S. household is theoretically saving $1,750 per year versus peak energy costs
Unfortunately, the bad news is the trailing 12-month index only recently peaked in February 2023 and is just starting to turn lower, down 3% since then - consumers are still hurting
Although energy prices have come down in recent months, lower prices will take time to work their way into consumers pockets
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Enersection's Residential Energy Index suggests annual residential energy costs in the U.S. are at $5,489 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 18% year-over-year, the largest drop in the last decade, with more room to fall.
Retail gasoline costs are currently in-line with oil costs. Crack spread expansions post-2020 is visible.
Residential gas prices delivered by LDCs have come way in, tracking the natural gas price cliff dive. Global gas supplies are currently robust.
Most abnormal is the relationship between natural gas and electricity prices, which tend to lag. We use a regression to forecast the last two month of the retail gas and electricity price changes. The 2023 distance from the regression line from actual rather than forecasted data, suggests electricity costs may remain sticky.
Spot prices have moved lower, while trailing prices have remained stubborn. Consumers should begin to see outright energy bill deflation as recent commodity price movements make their way through the system. It appears electricity prices may be becoming less correlated to natural gas price movements.