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Energy prices have plummeted due to concerns over the banking crisis, but this is likely only a short-term dip, according to an energy expert.
Unfortunately, this means customers who have been facing soaring bills won't see much relief.
The Energy Information Administration (EIA) projected that the price of electricity, specifically in the residential sector, will increase in 2023 and in 2024. In 2022, the average cost of electricity in the U.S. was 15.12 cents per kilowatt-hour. That's projected to rise to 15.63 and 15.66 cents over the next two years, according to EIA data.
Workers with Southern California Edison replace a transformer on Holt Street in Santa Ana, Calif., Sept. 10, 2021. (Paul Bersebach/MediaNews Group/Orange County Register via Getty Images / Getty Images)
"I'm afraid we're going to have to get used to a new era of higher energy prices across the board," Price Futures Group Senior Analyst Phil Flynn told FOX Business. Flynn is also a FOX Business contributor.
FOOD, RENT AND ENERGY PRICES REMAIN HIGH IN FEBRUARY INFLATION BREAKDOWN
Flynn explained that energy prices are plunging on concerns over the banking crisis, which unfolded two weeks ago when Silicon Valley Bank failed, and not because demand for oil supplies has suddenly dried up.
"Supplies versus demand are about as tight as they have ever been," he added.
HOUSE REPUBLICANS PROPOSE MAJOR ENERGY AND PERMITTING REFORM PACKAGE
A Pacific Gas & Electric worker walks in front of a truck in San Francisco. (AP Photo/Jeff Chiu / AP Newsroom)
Global energy consumption has rebounded from the start of the COVID-19 pandemic, and supply was barely keeping pace with demand before the war in Ukraine further reduced stockpiles. As a result, energy prices remain elevated, squeezing already tight household budgets even further.
The National Energy Assistance Directors’ Association (NEADA) announced in January it had the highest total number of Low Income Home Energy Assistance Program (LIHEAP) applications this winter since 2011 "as families struggle with paying some of their biggest home energy bills in more than a decade."
MARKETS MAY BE UNDERESTIMATING THE THREAT OF HIGH INFLATION, BLACKROCK WARNS
During winter, the number of households receiving energy assistance jumped by an estimated 1.3 million. This doesn't "even account for possible increases in applications this summer to help families pay for air conditioning as they deal with rising temperatures due to climate change," the NEADA added.
If the banking situation stabilizes, it will actually make matters worse with respect to oil supplies, according to Flynn.
An electric meter outside a home. (iStock / iStock)
"It will actually be more bullish for energy prices because the banks are going to be less likely to lend money," he said, adding that oil companies that are uncertain about the economy might not follow through on making investments in oil.
"On top of that, you have the current administration that makes it difficult to get a project off the ground anyway."
UNDERLYING ENERGY MARKET CONDITIONS COULD SIGNAL PAIN FOR CONSUMERS THIS WINTER AND BEYOND
All those factors would contribute to a "massive underinvestment" in future supplies, which, in turn, could cause higher energy prices "for decades maybe to come," he added.
"At the end of the day, demand is on an upward trend and production is not keeping up, and it's going to have a difficult time keeping up because the investment dollars just aren't there," he said.
A gas stove lets off a blue flame inside a kitchen in Barcelona. (Davide Bonaldo/SOPA Images/LightRocket via Getty Image / Getty Images)
If we want low energy prices at this point, you have to "be rooting for a recession or a major economic slowdown," Flynn noted.
However, given that the supply and demand balance is so tight, "if the economy continues to grow, prices are going to have to go up to move demand and encourage future investment," according to Flynn.
It's important to keep in mind, though, that bills are contingent on electricity usage as well as the price of energy.
For instance, Consolidated Edison Inc., or ConEd, which provides energy to roughly 10 million people in New York City and Westchester County, has been advising customers to be "particularly mindful of managing their usage at a time when energy prices are high across the country." close video US energy needs to be ‘affordable, reliable and cleaner’: Chevron CEO Mike Wirth
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Luckily, a warmer winter helped to depress energy usage, meaning customers didn't see the big spike in bills that happened in January 2022, a spokesperson for ConEd told FOX Business.
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Still, the company has been offering its customers payment plans to help ease the financial burden.
A renewable energy group founded by the former chief executive of Petrofac, the oilfield services group which collapsed during the autumn, will this week announce a £40m fundraising despite signs of growing tension over its leadership.
Sky News has learnt that Venterra, which was set up four years ago by Ayman Asfari, will unveil the capital injection as early as Monday.
Its backers will include existing shareholders Beyond Net Zero, a fund affiliated with the private equity firm General Atlantic, and First Reserve, another private equity investor.
The fundraising will come amid a challenging climate sweeping through swathes of the renewable energy sector.
While offshore wind remains an important element of the global energy transition, the shifting investment priorities, in part precipitated by Donald Trump’s second term as US president, have resulted in slower growth than anticipated for companies such as Venterra.
One source said there had been growing tensions in recent months over Mr Asfari’s role at the company and its prospects for 2026.
Venterra has already raised a total of £250m in equity since it was formed.
Israel has approved 19 new Jewish settlements in the occupied West Bank in a fresh blow to the possibility of a Palestinian state.
The move brings the number of new settlements over the past few years to 69, a new record, according to Israel‘s far-right finance minister Betzalel Smotrich.
Widely considered illegal under international law, the settlements have been criticised for fragmenting the territory of a future Palestinian state by confiscating land and displacing residents.
Image: Ganim pictured in 2005. Pic: Reuters
Under Israel’s current government, figures show, the number of settlements in the West Bank has surged by nearly 50%, rising from 141 in 2022, to 210 with the new approvals, according to Peace Now, an anti-settlement watchdog.
The government’s latest action retroactively authorises some previously-established outposts or neighbourhoods of existing settlements, and the creation of settlements on land where Palestinians were evacuated.
Earlier this month: Inside an illegal Israeli outpost
It also approves Kadim and Ganim, two of the four settlements dismantled in 2005, and which Israelis were previously banned from re-entering as part of Israel’s withdrawal from the Gaza Strip.
Since Israel repealed the 2005 act in March 2023, there have been multiple attempts to resettle them.
Image: Betzalel Smotrich is among prominent names backing the settlements. Pic: AP
The move comes amid mounting pressure from the US to move ahead with the second phase of the Gaza ceasefire, which took effect on 10 October.
Mr Smotrich is one of a number of figures now prominent in Israel’s government who back the settlements.
The West Bank, east Jerusalem, and Gaza are claimed by the Palestinians for their future state, but were captured by Israel in the 1967 war.
Today over 500,000 Jews are settled in the West Bank, in addition to over 200,000 in contested east Jerusalem.
Settlements can range in size from a single dwelling to a collection of high-rises, and the occupied territories are also host to a number of unauthorised Israeli outposts.
The earliest publicly known survivor of Jeffrey Epstein’s abuse has told Sky News there was a “wilful blindness” about the young women and children around him – as she claimed the US Department of Justice (DoJ) had “broken the law” with the Epstein files.
Warning: This article contains details of sexual assault.
In 1991, Jess Michaels, then a 22-year-old professional dancer, was introduced to Epsteinby a roommate who said he had a “fabulous experience” with the financier.
They met twice, with the first meeting being an interview at his office in Madison Avenue for a role as a masseuse.
During their second meeting at Epstein’s penthouse, she said he raped her.
Speaking to Sky News presenter Barbara Serra, Ms Michaels said that while she did not meet anyone else in connection with the convicted sex offender, “the volume of wilful blindness and blatant disregard for the protection of the young women and the children” that were “very obviously around Jeffrey Epstein” was “horrific”.
Three months after her encounter with Epstein, Ms Michaels said she left New York “because of the anxiety and the insomnia”.
Six months after, she said she could “pull a pair of size zero jeans down off of my hips because I was really struggling to even eat properly”, and noted that a friend remembered she “just slept all the time”.
Image: Jess Michaels said Epstein raped her when she was 22 in 1991. Pic: Reuters
‘That didn’t even get us justice’
Speaking almost 35 years after her ordeal and days after the release of thousands of files relating to Epstein, Ms Michaels said her mission now “is that nothing like this happens again and that we change something”.
However, the White House has come under heavy criticism as only a fraction of the files have so far been released, with many heavily redacted and some disappearing after being uploaded.
What was in the new Epstein files?
When asked how she felt about the latest release, Ms Michaels noted that the Epstein Transparency Act, signed by Donald Trump in November, required the DoJ to release all files by 19 December.
“The US Department of Justice has broken the law,” she said. “Blatantly so. So sometimes I hear from people or journalists, ‘so how do you feel? what comes up next?’ I actually don’t care.”
She added the DoJ had “proved the point of why we needed to get an Act of Congress to actually listen to us and try to get justice. And that didn’t even get us justice.”
Ms Michaels later said “it’s not unexpected”, and said it marked the “exact same treatment we have received across five administrations”.
It is important to note that inclusion in the Epstein files does not infer any wrongdoing.
Image: Pic: Reuters
‘What do you expect us to do?’
Ms Michaels said she had been looking for her own statement she made to the FBI about Epstein, and said many survivors “want to hear the FBI tipline recordings because it proves the volume of victims that did come forward that maybe got disregarded”.
In the wake of Epstein’s arrest in 2019, the FBI set up a telephone number for any information on his crimes. However, Ms Michaels said she “initially got disregarded” when she rang.
“When they called back in 2019, the officer said to me, ‘Well, we have to call everyone back, but it was 30 years ago. What do you expect us to do about it now?'”
Epstein survivor demands release of ‘all’ files
Ms Michaels said she has not been able to find any information on her call to the FBI in the files released, and said it is “extremely frustrating because we don’t know how to easily search this database”.
She also noted that despite being told her statement was going to be used in Epstein’s ex-girlfriend Ghislaine Maxwell’s2021 sex trafficking trial, “I never heard a word” and that “the lack of statement proves the negligence we’ve been saying all along”.
Ms Michaels is the earliest victim of Epstein to have come forward with her experience.
Epstein died in prison in 2019 while awaiting trial on sex trafficking charges.
He did not face prosecution for crimes relating to the sexual abuse of young girls until the 2000s. He was later arrested in Florida on state felony charges of procuring a minor for prostitution and solicitation of a prostitute in 2006.
An FBI investigation also found dozens of women had accused the financier of sexual assault, and it looked likely that the 53-page federal indictment built against him would see him face a lengthy prison sentence.
Epstein instead agreed to a plea deal and was convicted on those state charges, and was sentenced to 18 months in prison and was registered as a sex offender.
At the time of his death, Epstein was being held in custody on charges related to running a sex-trafficking scheme that involved dozens of underage girls.
He had pleaded not guilty and faced up to 45 years in prison if convicted.
Epstein was specifically accused of using his private jet, nicknamed the Lolita Express, to shuttle girls as young as 14 between his lavish residences in New York and Florida between 2002 and 2005.
In a post on X, US attorney general Pam Bondi said the DoJ would “bring charges against anyone involved in the trafficking and exploitation of Jeffrey Epstein’s victims”.
“We reaffirm this commitment, and ask any victim to please come forward with any information pertaining to any individuals who engaged in illicit activity at their expense,” she said.
“We have met with many victims and victims groups, and will continue to do so if more reach out. Please contact myself, DAG Blanche, or the FBI and we will investigate immediately. We believe in the equal standard of justice in this country and will ensure that Justice is served.”
The US deputy attorney general, Todd Blanche, said the justice department was continuing to review the remaining Epstein files and was withholding some documents under exemptions meant to protect victims.
“The only redactions being applied to the documents are those required by law – full stop. Consistent with the statute and applicable laws, we are not redacting the names of individuals or politicians unless they are a victim,” the justice department said, quoting Mr Blanche in a post on X.