(NewsInsights.org) – President Joe Biden’s policies will continue to drive the cost of power up for the foreseeable future if they don’t change, according to a new study from Bank of America. Published on July 2, “Powering the Revolution” draws direct parallels between rising electricity prices and the administration’s decision to promote electric vehicles (EV), heat pumps, data centers for AI development, and onshore manufacturing expansions.
As Bank of America’s figures point out, Americans did enjoy a brief amount of respite from rising costs in the first few months of this year. The financial institution’s internal data supports a small but notable 1.4% decline in the median amount paid for electricity per customer between March and May. However, this limited improvement pales in comparison to the substantially higher increases between 2019 and 2024.
According to Bank of America, the average US customer now pays nearly 20% more for power than they did five years ago. Millennials saw the greatest increase in utility costs, as their bills skyrocketed by 30 to 40%, perhaps as a result of becoming first-time homebuyers or moving into larger properties.
Baby Boomers and Gen Xers experienced slightly smaller increases of 18% to 19%, respectively. However, this is of little consolation given that most are now paying nearly $120 for every $100 they spent on utilities in 2019.
Those figures become even harder to swallow when you look at the average monthly cost for power in 2024. Homeowners are shelling out about $300 per month, while renters face bills closer to $200. That translates out to up to 8% of the total income for someone making $4000 a month or less.
Bank of America directly ties these increases to swiftly rising power demand. A small amount of these shifts are attributable to the average consumer, who has increased needs for cooling in the home, adopted heat pumps, and used electric vehicle charging ports.
The vast majority of rising demand, however, stems from much broader industrial trends beyond the consumer’s control. Efforts to expand onshore manufacturing plants are largely driven by legislation like the CHIPS Act and the Inflation Reduction Act (IRA). While beneficial, each new plant that comes online further increases the load on the grid.
The current AI technology boom is a significant contributor. In March, Maryland-based electric company CPower predicted that data centers will monopolize up to 30% of America’s total demand by as early as 2026.
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