It is always Carbon Lighthouse’s policy to let the data speak for itself, and we will stick to that policy in this article. It is also worth noting, however, that we feel justified in statistically defining the word “bonkers” as not 3, not 4, not even 5, but “6 standard deviations outside of the mean”. 

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With that definition in hand, we are now safe to say that utility rates went “bonkers” in 2022. A picture is worth a thousand words:

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One building does not a trend make, and though an 100% increase over the year is about as large an increase as we saw anywhere, rates went up dramatically across the United States in 2022. More data:

• Bloomberg and NPR report average of 15.8% increase across the United States for electricity, with natural gas prices increasing 33%. [1, 2]

• In New York specifically, wholesale electric prices went up 20% to 30%. [3]

• In Connecticut, purchases of 3rd party power saved more than $10M in the first 9 months of the year due to long-term contracts that were signed before Russia invaded Ukraine. Now, however, 3rd party purchase rates are increasing from $0.107/kWh to $0.215/kWh, an 101% increase. Connecticut is instituting a relief program. [4]

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To put the national average increases in historic context, going back 10 years we can see the increase in 2022 is far outside the norm:

To further quantify the above chart:

• The standard deviation in change from year to year is 2.87%.
• The change from 2021 to 2022 was 17.8% (Bureau of Labor Statistics has slightly different numbers than Bloomberg since the data above is filtered for Cities. Rural areas experienced a larger increase.)
• This change is 6 standard deviations outside of the mean. For context on how rare an event like this is, when Physicists at CERN discovered the Higgs Boson they were proud to have 5 standard deviations of significance. This was one of the greatest achievements in all the history of particle physics. 

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Taking off the statistics hat for a moment, there is real damage being caused by these increases in rates. NEADA reports more than 20million families fell behind on their utility bills in 2022 [5], and for commercial tenants who were already struggling, particularly in retail with margins already suffering from inflation, the increased costs may be tough to bear. Landlords of office buildings in particular do not have as many tenants to share the burden of increased costs with. 

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Energy savings have become more valuable than ever, both for reducing cash burn for landlords and as or more importantly, for attracting tenants in challenging markets. Contact Carbon Lighthouse to find out if you might be able to achieve fast payback, low-cost projects to help mitigate the damage.

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