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| U.S. Energy Information Administration data |
Across the country, utility companies are replacing leaky pipes and upgrading natural gas infrastructure, which is expensive. "Because it's a monopoly utility, regulators will pass those costs on to ratepayers," reports Jeff Brady of NPR. "Gas utilities have increased construction spending dramatically in recent years — up 50% from 2022 to 2023, to $49.1 billion."
Since gas companies don't make money selling gas, they aim to profit from reconstruction costs. "Utilities make their money by building new infrastructure, such as pipelines, and replacing outdated infrastructure," Brady explains. "Regulators then allow companies to recover those costs, plus profits, in customer bills."
Even as the cost of natural gas has dipped, consumers haven't benefited. "In 1984, about two-thirds of gas utility bills paid for the gas, and one-third covered infrastructure, utility costs and taxes," Brady reports. "Now that has flipped. In 2024, less than a third of customer bills went to gas, and about two-thirds went to the other costs."
One solution to reduce utility costs is for state regulators to encourage utilities to repair rather than replace faulty pipes. Regulators in Massachusetts asked gas companies to do three things to hold down costs: Fix pipes, shut down segments of leaky pipes and install electric heat pumps. Brady adds, "State officials say gas utility customers could see up to a 17% decrease in a pipeline replacement surcharge on their monthly bills."
from The Rural Blog https://ift.tt/41ehJxQ If natural gas is relatively cheap, why are so many Americans facing higher utility bills? - Entrepreneur Generations
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