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    Frankly, Scarlett, Retail Electricity Rates are Rising at Fastest Rate in Years

    March 1, 2022
    The nominal retail electricity price increase 4.3 percent to 13.72 cents per kWh in 2021. Adjusted for inflation, though, it's the lowest rate since 2006.
    800px Poster Gone With The Wind 01 621e94880e606

    Sticker shock is not just for houses, automobiles and grocery items anymore. It's making history in the comfort of our homes, too.

    The retail price of electricity paid by U.S. residential customer rose last year by the fastest rate in the previous 13 years, according to the federal Energy Information Administration.

    The nominal retail electricity price increase 4.3 percent to 13.72 cents per kWh in 2021, the EIA reported. This increase is in line with last year’s inflation rate of 4.7 percent indicated by the U.S. Consumer Price Index.

    The cost of natural gas, which supplies close to 40 percent of the U.S. power generation mix, drove much of the elevation in retail electricity rates. Driven downward in previous years due to high supplies and the COVID-19 pandemic economic downturn, natural gas rallied in 2021 to $4.98 per million British thermal units (Btus) delivered to power plants.

    Inflation is a tricky indicator sometimes, though, considering that overall U.S. prices rose at low rates for decades. The real price of the all time high of nearly 14 cents per kWh rate last year was actually the lowest level since 2006 when adjusted for inflation, according to the EIA. That's the same math that informs you "Gone with the Wind" is still the all-time Box Office leader and not  "Avatar" or "Avengers: Endgame" (but it gave us a good excuse to use movie art).

    The agency forecasts that retail electricity rates will continue to rise in 2022, although at a slower rate of 3.9 percent to 14.26 cents per kWh. 

    About the Author

    Rod Walton, EnergyTech Managing Editor | Senior Editor

    For EnergyTech editorial inquiries, please contact Managing Editor Rod Walton at [email protected].

    Rod Walton has spent 15 years covering the energy industry as a newspaper and trade journalist. He formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.

    Walton earned his Bachelors degree in journalism from the University of Oklahoma. His career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World. 

    EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.

    He was named Managing Editor for Microgrid Knowledge and EnergyTech starting July 1, 2023

    Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.

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