Rising temperatures mean higher utility costs for millions of Americans

As Americans recognized Mother’s Day, consumers noticed the impact climate change: Rising temperatures across the United States are straining budgets and in some cases forcing families to choose between cooling their homes and buying groceries.

In a recent analysis of its customers’ spending patterns, the Bank of America Research Institute found that more intense heat is driving higher energy costs, with more than half of U.S. counties facing potentially higher utility and other related costs. As of March, customers’ total monthly utility bills, including water, gas and electricity, averaged about $300, up about 25% from 2019.

“As the frequency and severity of climate events and conditions continue to increase, households may face additional costs. For example, households experiencing heat waves and higher average temperatures are more likely to use air conditioners, which can increase energy consumption and related costs,” the report’s authors wrote.

Bank of America uses aggregated and anonymized customer data to track utility payments and analyze cost overruns.

Rising temperatures have put lower-income households in particular under greater financial strain, with average utility bills rising by 38% for people making less than $50,000 a year between March 2019 and March 2024.

This is driven by what researchers call the “urban heat island” effect. Because low-income people live in warmer regions of the United States, these households experience more heat than higher-income households. In places like Reno, Nevada and Las Vegas, consumer utility bills rose more than 40% in March compared to the same month in 2019, the report said.

Rising utility costs are just one expense Americans have faced since inflation began to rise during the pandemic. Although the pandemic has subsided, many consumers are still facing severe financial stress. According to recent Census data, about 38% of households earning less than $50,000 said they were unable to pay or pay a bill in full at least once in the past 12 months.

The truth is, while air conditioning has gone from luxury to necessity, not all Americans can afford to run it.

“We know some people won’t open them because they’re afraid of this bill,” Mark Wolf, executive director of the National Energy Assistance Directors Association, told CBS Financial Watch.

Meanwhile, experts say old ways of dealing with heat waves just won’t cut it. Wolff explained that cooling centers can relieve discomfort during short periods of hot weather, but are less effective because heat waves last longer than a day or two.

“This model does not work. You can’t have people come to the library for a week – that’s the model from decades ago,” he said.

Michael Mendez, a climate change researcher and assistant professor at the University of California, Irvine, added that many communities across the country can experience extreme temperatures for up to 10 months each year.

“As a result, individuals have to pay higher utility bills to maintain a comfortable home. Especially those on fixed incomes and low incomes are making a choice between keeping their house cool or paying their grocery bills,” Mendez said. Therefore, it has a significant impact on households and their ability to purchase other basic necessities such as groceries. “