2024 Budget: Get Ready, Higher Electric, Gas and Water Bills are Coming!
Updated: Sep 12
Energy prices have continued to climb throughout 2023, due in large part to the continuing war in Ukraine. The price of crude oil rose seven percent in 2022 and has risen an additional eight percent already in 2023. Natural gas prices remain high and are projected to continue climbing by approximately six percent quarterly for at least the first half of 2024. Because natural gas and coal are the primary fuels used for power generation, coal is also expected to increase in price by at least four percent per quarter throughout the first half of next year.
Your organization will continue to be impacted by these increases. Monthly bills for electricity and natural gas have been increasing since early 2022 and are expected to go higher. With utilities expenses consuming 60-80 percent of most church facilities budgets, these increases have the potential to be particularly impactful.
As you budget for 2024, spend some extra time on your electric and natural gas projections. Your budget needs to include an estimate of the units of energy you’ll consume each month and how much each of those units (kWh or Therms/CCF) will cost. Follow these steps and you’ll be on your way to building an informed utilities budget.
1. Estimate monthly consumption for both gas and electricity by looking at historic usage.
2. Use your most recent gas bill to calculate a unit cost for gas. Divide the total bill amount by the number of therms/CCF to calculate this number.
3. Perform the same calculation with your electric bill and find your unit cost per kWh.
4. For both electric and gas, identify the most recent fuel charge per kWh or Therm/CCF on your bill. (This is the portion that will be impacted by rising prices.) Make an estimate of how much you expect it to increase for 2024 and add this increase to the average unit costs you’ve already calculated. (We recommend increasing the fuel charge component by five to six percent quarterly for both electricity and natural gas.) You now have your 2024 projected unit costs for both electricity and natural gas.
5. Multiply your projected monthly consumption developed in Step 1 by the projected unit costs calculated in Step 4 and you’ll have projected monthly budget numbers for both electricity and natural gas.
While costs for water aren’t directly tied to commodity costs as are electricity and natural gas, water and sewer utilities are being impacted by the rising costs of energy as they provide service to you and other customers. You can expect rate increases from those providers as they pass on the impact of these rising costs. We would budget for an increase of three percent in both water and sewer rates to prepare for these increases.
Kent Hobart is the founder and principal of Utility Refund Specialists; a utility bill auditing firm based in Denton, TX. His client’s take advantage of his uncommon knowledge of utility rates and billing systems to find errors in their bills and get refunds from their electric, gas and water providers. If you need complimentary help with your utilities budget contact Kent at (813) 917-8952 or email@example.com.