Yahoo points out the obvious:
With the nation's demand for electricity soaring, the cost of staying cool this summer is on the rise.
But there's the doom and gloom angle.
The higher cost is not a good sign for the economy. Paying for the extra kilowatt hours will hit consumer pocketbooks later this summer or early in the fall - one of the peak retail periods, when many families could be wandering the aisles for back-to-school purchases. And the cost of beating the heat is especially difficult for senior citizens and the poor, prompting calls for federal emergency funds.
Warning - I've got my soapbox mode on:
Aaaarrgggghhhh! I feel like saying "GET OVER IT." When demand for something increases, given production decisions, its price increases. It's a fact of life and it's a necessary fact of life. It's how stuff gets allocated to its most valued use. Moreover, choices are being made between goods. The people who are buying electricity are powering their appliances, keeping their food and their houses cool today, and they are lighting up their houses. Do these choices not provide benefits? So what if energy expenditures today reduce consumption on other things tomorrow? People make choices that involve tradeoffs. This is also a fact of life.
And lastly, if consumers are relatively unresponsive to price changes (meaning they don't cut back much on their consumption of a good when its price changes - i.e. demand is "inelastic"), consumers will spend more on that good. I did a quick google search and found that demand for electricity is indeed inelastic, at least during a short period of time. This isn't surprising since electricity is used to run appliances and lights and during a short period of time, people don't have much of a choice about how they want to run their refrigerator or their stove or their heating/cooling system. They do have a choice in how much they want to run these things, but if people want them to be run, they are pretty much resigned to use the power source that comes into their house. If they have electric stoves and electric water heaters, then they will use electricity. Decisions to switch from electric to gas appliances is a long-term decision, so during expected short-term spikes in electricity prices, people make do with the appliances they have.
If you really want people to conserve electricity, let its retail price rise.
Besides, why do we need federal emergency funds in this case?
Soapbox mode off. Thank you for letting me rant.