Your electricity bill is the highest it’s been since 2008 – and it’s likely to rise again this year.
Residential electricity prices increased dramatically in most areas of the country in 2014, with the average U.S. residential price climbing 3.1 percent compared to 2013, according to newly released data from the U.S. Energy Information Administration.
Related: The Real Reason More Homeowners Are Going Solar
This represents the highest annual growth rate in six years, and EIA predicts prices will continue to rise again this year, albeit at a much slower pace. It expects an increase of about 1 percent, which would be the lowest increase since 2010.
In some parts of the country such as the Pacific Coast, the hike in electricity prices in 2014 was much lower than the national average at 1.3 percent – while in New England, it was a whopping 9.9 percent.
The increase is due mostly to the electricity industry’s major upgrades to its systems, especially to its transmission and distribution infrastructure. Higher wholesale power prices also contributed to the rise in retail prices as electricity providers pass the cost along to consumers.
Other reasons include new requirements to generate electricity from renewable energy sources as dictated by the U.S. Environmental Protection Agency.
Related: 8 Things That Will Get Cheaper in 2015
The EPA’s proposed carbon rule and power plant regulations, for instance, will likely increase the cost of electricity and natural gas by nearly $300 million between 2012 and 2020, according to a study conducted by Energy Ventures Analysis and released in November.
For a typical U.S. household’s annual electricity and natural gas bill, that increase will equal roughly $680, or 35 percent – and it will rise every year after as EPA regulations tighten.
Despite such a gloomy outlook, it’s not all bad news. Retail electricity prices have historically risen at a lower rate than inflation and the real price of electricity is actually lower than it was before 1995, the EIA says.
Top Reads from The Fiscal Times: