Rate Runup Moderating

February’s Consumer Price Index for electricity was up 12.9 percent year-over-year. March’s CPI for electricity was up by less, 10.2 percent year-over-year.

And now April’s CPI for electricity is in. April’s was up by even less, 8.4 percent year-over-year.

This is the clearest sign yet that the runup in residential electric rates is moderating. It was a little rough there for a while. Driven by the abrupt rise in natural gas prices in the spring and summer of last year from Russia’s invasion of Ukraine.

For example, the CPI for electricity as recently as last December was up 14.8 percent year-over-year. Last September it was up 15.5 percent year-over-year.

The Producer Price Index for April came in yesterday. Included was the PPI for natural gas purchased by powerplants. After sharp declines in these prices in both March and April, April’s PPI for gas purchased by powerplants is up only 2.8 percent year-over-year. So, expect further moderation in residential electric rates in the months ahead.

Inflation for electricity is still outpacing overall inflation. April’s CPI for all goods and services was up 4.9 percent year-over-year.

But perhaps it won’t be long before electricity gets back to closely tracking the index for all prices. Sometimes even losing ground to the index for all prices, as has typically been the case in recent years pre-invasion.