I found a more pesssimistic view looking at price indices for electricity(both the PCE and CPI), which show an over 3.5x increase in price from 1980-2024. And thus little improvement in affordability. Do you know anything about how these are constructed and what may explain the differing results?
Looking at the methodology for the cpi electricity price index, it seems to account for taxes, peak vs off-peak rates and other factors that could affect the measurement of prices over time. From the link you mentioned: "Average prices are best used to measure the price level in a particular month, not to measure price change over time. It is more appropriate to use CPI index values for the particular item categories to measure price change." Using the same blue-collar compensation series as you, there was a roughly 11% increase in abundance between 1980 and 2024. You can see how the price indices for energy are constructed for the CPI here: https://www.bls.gov/cpi/factsheets/household-energy.htm
How much of the recent increase in nominal energy costs is due to California and a few others states? Here in Arizona, I know that my electricity bill has not gone up by anything like that amount. Perhaps that has something to do with the big nuclear plant not far away?
I found a more pesssimistic view looking at price indices for electricity(both the PCE and CPI), which show an over 3.5x increase in price from 1980-2024. And thus little improvement in affordability. Do you know anything about how these are constructed and what may explain the differing results?
Here is my kWh series:
https://fred.stlouisfed.org/series/APU000072610#
Thanks for reading. I use the kWh rates from the BLS and the blue-collar rates from measuringworth.com.
Looking at the methodology for the cpi electricity price index, it seems to account for taxes, peak vs off-peak rates and other factors that could affect the measurement of prices over time. From the link you mentioned: "Average prices are best used to measure the price level in a particular month, not to measure price change over time. It is more appropriate to use CPI index values for the particular item categories to measure price change." Using the same blue-collar compensation series as you, there was a roughly 11% increase in abundance between 1980 and 2024. You can see how the price indices for energy are constructed for the CPI here: https://www.bls.gov/cpi/factsheets/household-energy.htm
How much of the recent increase in nominal energy costs is due to California and a few others states? Here in Arizona, I know that my electricity bill has not gone up by anything like that amount. Perhaps that has something to do with the big nuclear plant not far away?
Good question Max. If you can get historical rates I would be happy to time price them for you.