Consumer Price Index

Measuring Price Change in the CPI: Household energy

The Consumer Price Index for household energy is a component of the fuels and utilities index, which is in the housing major group of the Consumer Price Index (CPI). The household energy index measures the price movement of residential energy items used for heating, cooling, lighting, cooking, and other appliances and household equipment. Together with the index for motor fuels, it makes up the special index for energy.

Item definition

Each month, the Bureau of Labor Statistics (BLS) publishes indexes, both seasonally adjusted and not seasonally adjusted, at the U.S. level for the following aggregates and items: household energy; fuel oil and other household fuels; fuel oil; propane, kerosene, and firewood; energy services; electricity; and utility (piped) gas service.

In addition, BLS publishes not seasonally adjusted monthly indexes for areas grouped by population size-classes, regions, region/size-classes, and for 3 self-representing metropolitan areas: household energy, energy services, electricity, and utility (piped) gas service.

Using the same collected data supporting production of the indexes, BLS calculates and publishes average price series for the price: per kWh of electricity, per therm of utility (piped) gas service, and per gallon of fuel oil.

All of these average price series are published for the Urban U.S., the area-size-classes, the Census regions and divisions, the region/size-classes, and when there is sufficient sample for 3 self-representing metropolitan areas.

Relative Importance

The relative importance of an item category is its percent of the CPI weight as of December of the most recent year.

Table A. Relative importance, December 2018
Item Relative importance

Fuels and utilities

4.686

Household energy

3.585

Fuel oil

0.109

Propane, kerosene, and firewood

0.075

Electricity

2.607

Utility (piped) gas service

0.794

Sample selection

The current sample of outlets priced for fuel oil and other household fuels are selected from the Point-of-Purchase Survey (POPS) and one-fourth of the sample is updated each year. The POPS is a household survey that identifies outlets where specific items are purchased and how much was spent in each reported outlet where such items were purchased. Characteristics such as consumption amount, customer type, and other price determining characteristics are selected by BLS data collectors based on information provided by the sampled outlets.

The current sample of outlets for electricity and for utility (piped) gas is selected from a sampling frame constructed from data provided by a third party source. The sample is updated once every 8 years, which is a departure from the standard CPI four year rotation. The market churn for these two services is low, thus lending itself to be rotated on a less frequent basis. The sample will be static for 4 of the 8 years, after which the sample will undergo routine semi-annual rotation over the following 4 years. Currently the sample is in a static phase, the next wave of new outlets will be collected in February 2023.

BLS uses probability procedures to obtain the specific consumption amounts to price over time. For electricity and utility (piped) gas service, the amounts are based on consumption averages as provided by the Department of Energy.

Probability sampling methods are also used to select the specific detailed characteristics associated with the consumption amounts identified for pricing. For electricity and utility (piped) gas service, characteristics selected include type of rate schedule (general residential, heating, non-heating, hot water heating, etc.), appropriate discounts, applicable tax jurisdictions, other unique billing conditions (peak/off-peak usage), and price determining characteristics which affect the price for the assigned consumption amounts.

Price collection

Once the sample has been selected and initiated, BLS field staff collect prices monthly by visiting and/or contacting respondents to obtain current price and item characteristic information in order to track price movements.

For electricity and utility (piped) gas service, data are collected on the following items:

  • Service charges—a fixed charge per bill
  • Consumption charges—for total monthly energy usage
  • Additional charges and/or credits
  • Taxes

The prices for electricity and for utility (piped) gas service include seasonal changes, such as going from summer to winter rates. Also included are additional charges and credits, such as purchase fuel adjustments.

Fuel oil and propane, kerosene, and firewood are priced in the same manner as other commodities in the CPI.

Price change

Electricity and utility (piped) gas service prices are subject to short-term temporary changes, in some cases large, based on changes in rates and riders, taxes, state and local regulations, or new fees or credits. This may result in sharp changes in CPI average price data for electricity or utility (piped) gas service in specific local areas.

Data

Access data for household fuel categories in our online database.

Additional information

Additional information may be obtained from the Consumer Price Index Information Office by email or calling 202-691-7000. Information on the CPI's overall methodology can be found in the BLS Handbook of Methods.

Last Modified Date: April 24, 2019