Energy costs in 2014 highest since 2008If the price of keeping the lights on seems higher this year than in recent history, you’re not just imagining things.

The average price of retail energy in 2014 was the highest it’s been in six years according to information released by the U.S. Energy Information Administration.

Nowhere to go but up

Energy consumers in 2014 saw an average increase of more than three percent over 2013’s prices. This is the largest cost escalation since 2008, when utility customers experienced a nearly six percent rise. Though energy costs have increased every year since, the size of the increase fluctuates widely. The trend will likely continue in 2015, but should only account for a one percent uptick from 2014’s prices.

According to the report, the New England area faced the worst of it. The average Northeast ratepayer fell victim to an almost 10 percent climb in energy costs in 2014, a figure impacted greatly by this past winter’s notorious weather-related energy spike. However, taking the polar vortex out of the equation, it is worth noting that the EIA does point out energy rate hikes overall have stayed below the general rate of inflation.

Getting to the bottom

The EIA mentions two causes for 2014’s augmentation: wholesale energy costs and infrastructure.

Since most utility companies acquire their energy through the wholesale energy market, these prices as susceptible to flux caused by a number of different variables like inclement weather and, most notably, natural gas prices. When the costs of doing business increase, so do the costs of providing business.

Infrastructure investment is another component to energy price increases nationwide. Energy providers in the U.S. are spending billions of dollars to repair, retrofit and rebuild the industry’s machinery in order to provide better service. A 2014 EIA energy distribution report listing the most popular distribution projects include burying power lines so they’re impervious to storms, installing smart grid technology to prevent and monitor blackouts as well as constantly maintaining necessary equipment to more readily attend to outages as they occur.

Additionally, as sustainable energy resources like solar, wind and biofuels become dominant players in the market, the means of acquiring energy through those avenues could result in ancillary infrastructure considerations. Like other such investments, those costs will trickle down from the companies to the customers by way of energy costs increases.