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Roughly 1 in 6 American households are behind on utility bills, as energy prices surge across the U.S. to the highest level in nearly 15 years. In the UK, household energy bills are up 80% compared to last year. Bloomberg News energy writer Will Wade joins Geoff Bennett to discuss.
Across the U.S. energy prices have spiked to the highest level in nearly 15 years, roughly one in six American households have fallen behind on paying their utility bills, meaning millions of Americans are facing power shut offs in the hottest stretch of the summer. The problem is even more acute over in Europe. In the U.K., household energy bills are up 80% over last year.
We're joined now by Will Wade who covers energy and climate for Bloomberg News. It's great to have you with us. And Will, I guess the first question is the obvious one, what accounts for these price hikes?
Will Wade, Bloomberg News:
The main thing is natural gas. Gas is about 37% of electricity in the United States and the price has pretty much tripled since the middle of last year.
In what way is climate change responsible for the surge in prices if at all?
It's not really a climate issue. It's really sort of the continued fallout from the pandemic. We saw gas shortages when people came out of lockdowns, middle of last year. There's still shortages around the world and that's driving up prices. And right now in the U.S. it's a price issue. We're worried about the price. But in Europe and Asia, they're actually running — worried about running out of fuel to create electricity.
In reading through some of your reporting, it's not just that utility prices are up. It's also that utility companies are way more aggressive about shutting off power to delinquent customers. Is that right?
There were policies in place during the pandemic, they were moratoriums against shutting off people. Those started to wind down at the end of last year, and that ran right into winter moratoriums, which are pretty common all over the place. You can't turn off people's power when it's cold, because they might die. So that brought us into spring. And you have to give people a few months notice, so that brings us to about now and now is when we're starting to see the utilities turn off the people that have fallen way behind.
How is this affecting people in a real way?
In a real way, it's a huge chunk out of their monthly take home, especially for people at the lower end of the income spectrum. I've talked to people all over the countries who are telling me, yeah, their bills are really, really high. And they're starting to notice it. A lot of folks are telling me that they have to cut back when they go to the grocery store. They're worried about filling their gas tank. And you know, there's folks that just can't pay their power bill, I was talking last week with a woman who had her power shut off from Minneapolis. Her bill had gone up to about $3,000 because she was a house cleaner. And all of her work dried up at the start of the pandemic and it's just — it's starting to come back. But she can't pay that back bill.
How long is this expected to last? I mean, here we are at the end of the summer, then comes fall. And then as we head into the winter, are we expected to see another price hike?
Yeah, gas prices are expected to stay high, at least through the winter. This is supposed to be the time when gas is people start storing gas for the winter. But if there's still those issues of supply all around the world, people are really concerned about winter. And the whole thing about the shut offs that we're seeing now. It doesn't — the price hikes that we're seeing now are going to stay high. The government aid that has been helping people is going to start to run out at times. And that means that the fundamental issue is people sometimes are starting to be unable to afford electricity.
You mentioned government assistance, I was going to ask you about what role if any, you know the state or federal governments have to play in either providing assistance to people or at least delaying some of those planned shut offs for folks who can't keep pace with the bills?
Their state programs, their federal programs, in fact, the government is trying to increase the amount of aid that's available this year. But it's a finite resource. And when it runs out, we're still faced with the problem that electricity is at least 15% more expensive than it was a year ago. And that is just something that a lot of people can't afford.
Will Wade covers energy and climate for Bloomberg News. It's great to have you with us, thank you.
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