More than 20 million households face a “tsunami of shutoffs” after falling behind on their utility bills as the price for electricity skyrockets because of decades-high inflation, experts predict.
Since the pre-pandemic era, the amount owed to utility companies has doubled for approximately one out of every six homes nationwide, according to Bloomberg News.
State governments had imposed moratoriums on utility shutoffs as tens of millions of Americans lost their jobs at the onset of the coronavirus pandemic.
But as states lifted lockdown measures following the mass vaccination drive, record levels of inflation put a stranglehold on the economy, driving up the cost of essential goods and services such as electricity, natural gas, fuel, and groceries.
Jean Su, a senior attorney at the Center for Biological Diversity, told Bloomberg News that the soaring utility costs will trigger a “tsunami of shutoffs.”
The most recent consumer price index report shows that electricity inflation rose by 15.2% in July compared to the same period a year ago.
The cost of electricity rose month-over-month by 1.9% in July.
Last month, the Bureau of Labor Statistics released a report indicating that inflation rose 8.5% — down slightly from 9.1% in June.
Analysts attribute the sharp price hikes to tightening supplies of natural gas, which is used to generate electricity.
Disruptions in the supply chain caused by the COVID pandemic as well as the ongoing Russian invasion of Ukraine have put pressure on the natural gas markets.
As of Thursday midday, natural gas was trading at around $9.35 per Metric Million British Thermal Unit (MMBtu). A year ago at this time, natural gas was less than half of today’s cost — $4.26 per MMBtu.
Soaring utility bills are coming at an inopportune moment as hundreds of millions of Americans were forced to rely on energy-intensive air conditioning to keep them cool during scorching heat waves this summer.