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Home energy costs rise sharply in Baltimore region, a result of war, inflation and other factors

Shocked at the gas pump? Wait until you open your electricity or natural gas bill.

Consumers across Baltimore and the nation are having to dig deeper to pay utility bills. Energy prices — already on the rise due to the economic recovery from the pandemic and a colder-than-normal winter that increased demand — spiked in the wake of Russia’s invasion of Ukraine.

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“Rising prices for energy ... is not unique to Baltimore,” said Karl Kever, a regional economist for the U.S. Bureau of Labor Statistics. “We are definitely seeing rising prices across the country.”

The cost of electricity in the Baltimore region jumped 18.4% in one year, according to a Bureau of Labor Statistics consumer price index released last week, meaning electricity that cost $1 to buy in February 2021 cost a little more than $1.18 last month. That’s the largest increase in electricity costs in nearly 14 years.

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Natural gas prices are rising in tandem with electricity, up 21.2% last month compared with a year earlier, the biggest such increase in nearly five years, the BLS index showed. About 40% of natural gas consumption in the U.S. is used to generate electric power with the rest going to commercial and home uses such as heating.

Consumers have been alarmed by increases in recent months, with some charges doubling, and some have contacted the Maryland Public Service Commission about their bills, said Jason Stanek, the chairman of the commission.

Stanek said record inflation that’s boosting prices of everything from groceries to cars also has led to higher energy costs.

“Whether for electricity or a natural gas furnace, people are paying a lot more, particularly in our region,” Stanek said. “There’s obviously a lot of concerns. We’re paying attention to it.”

Victoria Stewart, a BGE electric customer from Baltimore County, said she was “scared and nervous” when she got a bill for $350 at the end of February for her three-bedroom town house with no basement and a heat pump. The charges were $100 higher than the previous month and about $200 higher than a year ago, she said.

Stewart said she is worried about future bills and has started “unplugging everything not in use. No lights during the day at all and turning off any systems when I can.”

“We are a one-income household,” she said.

BGE said the average residential gas bills for the utility’s customers are about 23% higher than bills for the same period last year because of higher natural gas prices and the colder winter. Average residential electric bills are about 9% higher than bills for the same period last year.

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“This is largely driven by the cost of electric supply,” said Tasha Jamerson, a spokeswoman for Baltimore Gas and Electric, which serves much of the Baltimore region.

The electric commodity price for October through May of this year jumped 15% compared with the same period last year, Jamerson said. Natural gas commodity costs in the winter fluctuate depending on factors such as wholesale prices.

BGE’s costs, the delivery portion of the bill, remain unchanged, she said.

To try to blunt the impact of rising prices, BGE said it bought and stored more than 50% of its natural gas in the summer when prices were lower. That has limited the impact of wholesale price volatility this winter, Jamerson said. Because of the storage, BGE customers’ average gas increase for the winter has remained below the Energy Information Administration’s estimate of 30% and far below the agency’s estimate of 43% for oil customers and 54% for propane users, Jamerson said.

Customers’ bills can vary depending on actual use, furnace condition and the energy efficiency of their homes, she said. Energy efficiency improvements, she said, can cut winter heating costs by at least 20%.

Home energy costs are increasing along with the cost of motor fuels, which jumped so quickly after the Russian invasion of Ukraine that Maryland is considering suspending its gas tax temporarily.

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The average price of a gallon of regular gas in Baltimore stood at $4.21 Thursday, down nine cents from last week, but up from $2.85 a year ago, according to the automotive club AAA. The BLS report said prices for gasoline soared nearly 40% on a year-over-year basis in the region.

The price of crude oil has risen over the past year as driving and travel have rebounded from the pandemic and oil and gas suppliers struggle to increase production and keep up. The Russia invasion exacerbated the problem.

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The PSC, which regulates the state’s utilities, advises consumers with concerns about utility bills to first work with their utility to see whether a meter inspection or other assistance is needed. The PSC’s consumer affairs commission also can offer assistance.

And BGE offers bill relief options and assistance programs to help customers struggling to pay bills at bge.com/MyAccount.

Stanek noted that consumers also should expect to see some increases as of last month when a previously approved BGE delivery rate increase took effect. In 2020, the PSC approved a three-year rate increase that included a freeze on delivery rates for last year only. This year, an average customer will see an uptick of about $3 on electric costs and about $2 on gas. BGE is not able to request another rate increase before December 2023.

The commission also urges consumers to consider shopping on the open market for electricity and natural gas supply, as a way to lock in a supply rate and be shielded from wholesale market fluctuations. Regardless of supplier, electricity and gas still are distributed by BGE or another utility. About a fifth of BGE area customers have a supplier other than BGE, he said.

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Some relief, at least short term, is on the way, as temperatures rise and heating costs go down. Longer term, energy prices are expected to continue to rise though, especially with continued inflation and sanctions imposed on Russia in response to attacks on Ukraine.

Future gas and electric supply rates are uncertain, Jamerson said, “given the current volatile global environment.”

The Associated Press contributed to this article.


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