Inflation Note: Utility Bills

Posted On: Thursday - September 27th 2018 9:50AM MST
In Topics: 
  Economics  Inflation

Big one for Joe Customer, for back in 2006.

I've thought of the inflation in utility bills since keeping steady track in the early 1990's but had forgotten to put any mention in the previous Inflation posts (note new topic key). This will be a short note then, without any long-winded suspected explanation, because there's a whole lot to that.

I want to compare apples to apples here, so I am writing about the same utility district for both water and electricity. I will note the price change per ft3 of water and kW-hr of electricity, the base prices, and the change in the bills that have been received by Peak Stupidity. I have the old bills.

Back in the mid-1990's water used to cost 8 bucks on an easygoing month and $15 to $18 on a month during which we watered the lawn some. Now, we're talking $35 on a good month, > $45 on a slightly higher-use one, and forget watering the lawn - I don't really need to with the shade... got not much of a lawn! OK, that's just the payments, and I promised apples-to-apples. We use almost the same amount of water - 200 to 500 ft3 monthly. The cost per 100 ft3 has gone from $2 to $5, but the BASE CHARGE, meaning just the charge to be hooked up, has gone from $6 to $25.

Electricity bills that used to be as low as $25 and up to $80 are more like $80 on MINIMUM months to sky-high (if we don't watch it). The per-unit cost has gone from < 8¢ per kW-hr to almost 14¢ in that 22 year time period. The BASE CHARGE, however, has gone from $8 to just be hooked up, to $21 now. There are a whole bunch of taxes I didn't used to see, but I'm still paying the whole bill.

The mention of taxes brings up possible objections by the reader of "hey, they may have built a new sewer plant" or "what has changed with your electricity supply?", "Did the district grow and had to build a ton of infrastructure?", etc. Those are decent points, but this is a pretty long-term look though; call it 22 years. Lots of improvements are paid for via bond issues too, not just via the bill.

Let me just give you the numbers from this blogger's location and time frame:


Annual percentage inflation rates for these utilities:


Base Fee - 6.9%
Price per ft3 - 4.2%


Base Fee - 4.5%
Price per kW-hr - 2.6%


The inflation in the bills will be seen to vary due to the combination of the fixed cost (base fee) and the variable cost (amount used) monthly, so I can't give one hard number for each utility. Just look at those ANNUALIZED inflation rates though. Is the what the US Feral Gov't BLS has been telling us? I don't think so.

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