Floridians are feeling the heat in the Sunshine State, not just from the blazing sun but also from their increasing electric bills. Over the past year, residents across the state have witnessed a steady surge in electricity costs, leaving them searching for answers.
In February, Archie Collins, the CEO of Tampa Electric, announced rate increases in December, citing “the price of natural gas has tripled since 2020”, with more rate hikes expected to occur in April. April came, and Florida Power and Light and TECO raised rates by 10%, claiming to need to address costs from Hurricane Ian and Nicole, along with a volatile natural gas market. Duke Energy raised their rates by about 20%.
This upward trend traces back to October 2020, when prices started rising over the previous year’s price. Data from the Energy Information Administration (EIA) reveals that natural gas prices in Florida have been on an unrelenting upward trajectory. The trend culminated in an all-time high in July 2022 at $13.72 per thousand cubic feet. That price was up 142% from the $5.66 price in July 2020. Prices have cooled off since then. Data is only available through February 2023. Still, Florida electricity bills are expected to remain volatile.
So why exactly do electricity costs keep going up in Florida? To answer that, we need to look at the source of your electricity’s power. The answer leads us well beyond the coastal borders of the Sunshine State and into the global trends of El Nino, a decreasing reliance on coal power around the world, and the impacts of the Russia-Ukraine War.
Rising Temperatures Impact on Florida’s Electricity Prices
The University of Maine recorded data during the first week in July, marking the hottest week on record worldwide. Tampa Bay felt the heat on their electric bills as the city experienced consecutive days of heat advisories and heat indices soaring to a scorching 110 degrees.
In June this year, the NOAA’s Climate Prediction Center, a division of the National Weather Service, issued an advisory that El Nino is officially here. El Nino is the phenomenon of above-average temperatures in the central and eastern Pacific Ocean every 2-7 years. With it comes a range of climate impacts, including record-high temperatures. In addition to higher temps during typically hot months like July and August, the impact lasts longer into the year. That means there’s a good possibility that increased air conditioner usage may extend well into the fall and winter months.
Rising Temperature’s Effect on Your Air Conditioning Bill
The increased reliance on air conditioning during such extreme weather exacerbates the strain on electricity usage. It intensifies the burden on consumers’ wallets. Karen Ryan, public relations director with the Lee County Electric Cooperative, informed citizens that “For every degree below 78, you add 8% to your cooling costs. That’s just the cooling cost part of the bill.”
The increased demand for air conditioning during extreme heat waves directly correlates with increased demand for electricity and its power source. With 38.9% of the U.S.’s power coming from natural gas, it can significantly impact Florida residents’ power bills.
Demand For U.S. Natural Gas Is Increasing
There’s more going on with the average electricity bill than just an increased strain on your air conditioner this summer. What feels like a local issue results from changes to the global economy. The 10 to 20 percent increase in your electricity bill is attributed to major political trends over the past decade.
Global Reliance on Coal Decreasing
Despite a recent temporary decrease in natural gas prices, analysts predict that volatility will remain constant. As the world becomes less reliant on coal power, the demand for natural gas will continue to rise.
Guess who the world’s number one exporter of natural gas is? That’s right. As the largest producer of natural gas globally, the U.S. relies heavily on its production to produce electricity domestically and remains the top provider for other countries worldwide. Natural gas futures prices experienced record highs in 2022. That’s because the second largest producer of natural gas experienced sanctions from the global economy.
The Russian-Ukraine War’s Effect on Natural Gas
The ongoing conflict between Russia and Ukraine has far-reaching consequences that extend well beyond the geopolitical landscape. So far it can even be felt on the average Florida electricity bill. As tensions intensified in Eastern Europe, the impact of the Russia-Ukraine war was felt in the global gas market. Significant price fluctuations have been noticeable for Florida residents since the conflict began.
As the second largest natural gas supplier, Russia exports throughout Europe. However, many countries have placed sanctions on Russia, stopping or severely reducing any gas importation from the country for the foreseeable future. The result is an increased demand for U.S. natural gas, passing on the increased prices to the average consumer.
Reduce Your Average Electricity Bill by Switching to Solar
The combination of high temperatures and expensive electricity costs is a driving force behind the trend of switching to solar electricity. By harnessing the boundless energy of the sun, individuals can not only reduce their carbon footprint but also make significant savings on their electricity bills. The advantages of solar energy is well documented. Marketwatch recently documented that homeowners could save over $1,300 a year by switching to solar.
Save with SunVena, Florida’s Top-Rated Solar Company
If you want to explore solar energy options for your Florida home, contact SunVena, the top-rated solar panel company in Florida. Our experienced team can help you assess your solar potential and design a customized solar energy system that meets your needs. Make the switch to solar energy today with SunVena.