Despite skyrocketing electricity costs, the inflation rate in the Bay Area eased a bit. But even with signs of improvement, consumer prices continued to climb, rising faster than the national pace, a new report shows.
The Bay Area inflation rate rose by 3.2% on an annual basis in June — a modest improvement from the increase of 3.8% that the nine-county region posted in April, the U.S. Bureau of Labor Statistics reported Thursday.
Nationwide, inflation rose 3% during the one-year period that ended in June, the government agency reported.
In the Bay Area, however, one of the major reasons for the ongoing rise in consumer prices was a huge annualized jump in the price of electricity provided by utility companies such as PG&E.
Over the one-year period that ended in June, the cost of electricity delivered to homes rocketed higher by an eye-popping 26.9% in June, which coincided with an interim rate increase that state regulators awarded to PG&E.
The increase in the cost of electricity in the Bay Area exceeded the pace in May when electricity prices jumped 24.4%
Starting on July 1, PG&E instituted a temporary 9% decrease in electricity rates coinciding with the hot summer months, which should produce a short-term drop in monthly bills.
Prices for natural gas piped into homes by a utility such as PG&E zoomed higher by 21.7% over the 12 months ending in June.
Bay Area gasoline prices, however, are showing signs of easing after two months of double-digit annual gains. The cost of unleaded regular gasoline rose by a relatively sedate 2.7% in June.
But it was Bay Area food prices that were one of the hopeful components of the monthly inflation report in June.
Food prices in the Bay Area rose only 1.7% in June — a pace that was well below the overall inflation rate in the region.
The cost of food at home fell 0.3% last month, the report showed. However, the cost of food consumed away from home jumped 5.2%.
Here are the price changes over the most recent one-year period for some key food categories:
— Meat, poultry, fish and eggs, up 0.6% — a big improvement from the prior year when prices for this category had been soaring at a double-digit pace.
— Fruit and vegetable prices fell 0.1% — showing a year-to-year period decline for the last three months.
— Dairy products, down 0.6% — prices for these kinds of foods also have been falling lately.
— Cereals and bakery products, up 0.3% — still, this pace of increase is greatly subdued compared to the trends in 2022 and 2023.
The high costs for electricity and natural gas services provided by utilities such as PG&E have become a hot-button topic in recent years in the Bay Area.
An interim rate increase approved by the state Public Utilities Commission produced an average bill of $300 a month for the typical residential customer who receives combined electricity and gas services. That also marked the first time the average PG&E monthly bill reached the ominous milestone of $300.
As of April 2024, electricity bills averaged $226 a month for the typical residential customer, while gas bills averaged $74, according to PG&E.
During an Earth Day event in Richmond, as part of an impromptu interview with this news organization, PG&E Chief Executive Officer Patricia Poppe said the utility is taking steps to reduce monthly bills on a long-term basis.
“We see a future where customers’ bills can start to come down,” Poppe said in the interview.
Some Bay Area consumers, however, noted that electricity and gas prices charged by PG&E remain brutally high.
“PG&E is very expensive,” said San Jose resident Cynthia Mungray while filling up her gas tank at a Safeway Fuel Station in south San Jose. “It keeps going up.”
Mungray said her own PG&E bill is far more costly than it used to be.
“About a year or two ago, I was paying about $100 a month for PG&E,” Mungray said. “Now I’m paying $165 a month, if not more. It’s at least that much.”
Brandon Hayes, a San Jose resident, has solar energy for his residence in a hybrid arrangement in which he also receives conventional PG&E utility services.
“My electricity bill is higher than I would like,” said Hayes, also pumping gas at the Safeway station. “I’m still paying too much.”
“Gasoline prices are going down a little, but gas is still too expensive,” Hayes said.
Oakland-based PG&E should be able to start reducing electricity and gas bills on a long-term, more permanent basis by sometime in 2025 or 2026, PG&E executives have estimated on multiple occasions in recent months.
Asked whether she thought PG&E would actually achieve lower monthly utility bills, Mungray said, “I doubt it’s going to happen.”