Get ready for a spike in electricity costs – it might hurt wallets more, but it could at least benefit exchange traded funds (ETFs).
California State Assemblyman Chuck DeVore says in Red County that if you think gas is eating up your disposable income, wait until you see your electric and natural gas bills in the next year.
California receives 42% of its electricity from natural gas, and homes use the commodity for everything from cooking to heating. Prices for it has increased 45% so far in the last year, and the Wall Street Journal recently reported that costs may double again soon. Ann Davis and Russell Gold for the Wall Street Journal say that the global appetite for it is on the rise.
But as this chart courtesy of the Wall Street Journal shows, the United States is actually on the lower end of the price range:
It once was a regional commodity, often consumed where it was produced. But there have been innovations in transporting it, and the global trade is now in full force.
Coal and gas power 70% of America’s grid, as well, and the price of coal has doubled. This will ultimately translate into more costly electricity.
Suddenly, reading by candlelight doesn’t seem like such a bad idea.
Investors may find this as an opportunity to hedge the rising energy costs:
