Highest Among Consumer Goods Over Past Year

WASHINGTON – Electricity inflation remains the highest consumer goods cost among the items in the Consumer Price Index according to the latest release of data by the Bureau of Labor Statistics. Over the last year electricity prices have risen by 5% compared to 2.2% for food, and 2.5% for medical care commodities. The CPI index overall increased by 3.5% over the last 12 months. The price of electricity has soared because of the accelerating cost of transmission driven by incumbent monopoly utilities blocking competition, which lowers costs for consumers. Less than 10% of all transmission projects are competitively bid, despite FERC Order 1000, which was designed to usher in an era of competition.

In a statement, Paul Cicio, Chair of the Electricity Transmission Competition Coalition, said: “Electricity price increases have a far greater impact on consumers’ monthly budgets than other items in the basket of goods. Americans have been feeling the pinch from inflation, but electricity is the driving force behind tighter home budgets and inflationary pressure. As FERC looks to finalize its rule on regional transmission planning, they must see the monthly inflation data and take the only step that can bring prices down for consumers – embrace competition.”

Competitively bid electricity transmission projects have been shown to reduce costs to consumers by up to 40% according to The Brattle Group – assuming a conservative estimate, if only 33% of new transmission projects were competitively bid and there is an average cost savings of 40%, ratepayers could save an estimated $277 billion. If all new transmission projects were competitively bid at an average cost savings of 40%, ratepayers could save an estimated $840 billion by 2050.

Read more about the benefits of transmission competition in ETCC’s comprehensive report.

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