US Families Facing Highest Energy Bills in Years Are Making Tough Choices

A resident puts wood in an outdoor wood furnace to heat a house during a winter storm outside of Cynthiana, Kentucky. Photographer: Michael Swensen/Bloomberg Photo by Michael Swensen /Bloomberg

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(Bloomberg) — As weekend temperatures plummeted below freezing across the US, 27-year-old Jahdaya Francis turned off the radiators in her Yonkers, New York apartment and huddled around a small space heater. A few states away, in Prince George, Virginia, 36-year-old Samantha Smith shut off the electricity to half of the home she shares with her young daughter. 

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“I’m sleeping in the living room with a heated blanket on my loveseat, wearing sweatpants, socks, a long T-shirt and a North Face jacket,” Smith said. “But it’s not very warm.”

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Neither woman can afford to crank up the thermostat, even as a second winter storm is poised to bring more snow and freezing temperatures to the East Coast. Francis’s December heating bill topped $500 while Smith’s power costs surged above $600 — two to three times what they paid in the summer. 

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The deep freeze gripping much of the US is colliding with some of the highest energy costs in years — further straining households already squeezed by stubbornly high food and housing prices.

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Consumer prices for electricity and piped gas rose 7.7% in December from a year earlier, almost three times the pace of overall inflation.

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In some parts of the country, power prices have hit all-time highs, fueled by the massive buildout of artificial intelligence data centers that are driving demand to unprecedented levels. Those skyrocketing costs have emerged as a top campaign issue in the upcoming midterm elections, even prompting President Donald Trump and a host of governors to demand changes to the biggest US power grid. 

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Now, as below-normal temperatures grip a swathe of the US from the Great Lakes to the deep South and a “bomb cyclone” threatens coastal cities with another round of heavy snow, already-high prices are surging even more, with next-day power prices in New York jumping 31% Tuesday to break records for a third straight day.

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“It’s cold, and bills are going up,” said Mark Wolfe, executive director of the National Energy Assistance Directors Association.

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US home heating costs are set to climb 9.2% this winter, spurred by higher gas and electricity prices and below-average temperatures, according to calculations from Washington-based NEADA. The average household will spend $995 on heating this winter, the group projected, up from $911 last year.

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“It’s putting more pressure on family budgets,” said Wolfe. “People are very aware of their utility bills now.”

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Higher energy bills could drive American families to cut back on spending elsewhere.

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Data out last week showed US consumers continued to reliably spend  in November, but a drop in the savings rate — now at a three-year low — suggested many Americans were already stretching to do so. With consumer spending growth outpacing income gains, some economists worry about the sustainability of robust household demand.