Birmingham, Alabama — The cost of electrical appliances in the Birmingham area is climbing, with prices climbing by more than 20 percent over the last year.
The price of electricity and gas in the city jumped by 40 percent from 2014 to 2015.
Gas prices jumped by 30 percent.
There were 7.5 million customers with power, and the average residential bill rose by 8 percent.
Birmingham Mayor L. Brooks Patterson said the increase is due to a “lack of investment” by utilities in electric and gas, but he said he’s concerned the rate increases could keep going higher.
“It’s not just me, it’s everybody that’s been paying higher bills,” Patterson said.
“The average homeowner, they’re going to have to make some sacrifices in order to keep up with the costs.”
Electricity bills have increased by more $3,400 for every dollar a homeowner earns, Patterson said, adding that this could continue.
“There’s an issue here with the lack of investment,” he said.
Patterson said he and the city council are looking into whether the rate increase is related to the economic downturn.
“We’re going back and forth with utility companies trying to find out exactly what’s going on, what their plans are, how much money they’re spending on the rate,” he added.
The city’s utility commission is holding a hearing on Thursday about the increase and will decide whether to impose additional charges, Patterson added.
Birchwood Energy says its electric rates are now up by more then 30 percent, and its rate hike was tied to an increase in demand from the Birmingham Power &Light plant.
Birchardwood says the increase in electric rates is due largely to an increased demand from customers for power, but there are other factors at play, too.
Birchington Power & Light said it’s been hit hard by a reduction in demand, and it expects the cost of power will continue to increase.
The utility said it will review its plans for the future and look at options for restructuring and reducing its costs.
Birthington Power said it plans to increase the rate for residential customers, including its large customers, and for electric customers, but it has not set a specific date for the rate change.
Birlington Gas said its rate is now up 27 percent, but the utility said the cost will remain the same over time.
Gas prices have increased almost 15 percent since 2013, and Patterson said Birmingham Gas is paying an extra $3 per month to help offset the increased costs.