- The Washington Times - Thursday, March 9, 2006

Consumers are becoming increasingly concerned about rising energy prices as they take a bigger chunk out of their household budgets.

The Labor Department’s Consumer Energy Price Index rose 24.8 percent in the year before January 2006.

This week, the Maryland Public Service Commission, the state’s utility regulator, warned residents to expect price increases of 35 percent to 72 percent starting this summer.

“It’s definitely going to put a strain on the middle class, especially given the amount of debt the average family is carrying right now,” said Malik Crawford, U.S. Labor Department economist. “But that’s why SUV sales are plummeting.”

High energy prices could create another problem for the family budget by forcing up interest rates for homebuyers.

“When you’re talking about interest rates, you’re looking at the housing market slumping even more,” Mr. Crawford said. “That’s what stimulated a whole bunch of consumption the last few years.”

Natural gas showed the largest one-year percentage increase, up 34.5 percent by the end of January, according to the Labor Department. Gasoline prices rose an average of 27.4 percent, and electricity was up 15 percent.

Energy prices are showing up in public opinion polls as an issue of growing importance.

“It was among the issues that showed the biggest percent saying it should be a higher priority,” said Carroll Doherty, associate director of the Pew Research Center, a nonprofit public opinion foundation.

Energy costs from gasoline and home heating were the top two economic concerns listed by adults in a Pew Research Center survey in January. The survey followed President Bush’s State of the Union address.

The concern was greatest among low-income households.

The survey shows 54 percent of people in households earning less than $30,000 say gas prices are a big problem, compared with 36 percent of households earning $75,000 or more, the survey report said.

The median U.S. household income between 2002 and 2004 was $44,473, according to the Census Bureau.

Energy costs also have been affecting retail sales, where more consumers are purchasing products with the government’s “Energy Star” rating.

Energy Star means the products have the highest energy efficiency among more than 40 consumer products ranked.

“It’s mostly for frontloaders, so they can save on water bills and electric bills,” Asif Razaak, a salesman at the Sears in Westfield Shoppingtown Montgomery in Bethesda, said about his customers’ choice of washing machines.

About half his customers mention high energy prices when they buy washers and dryers, Mr. Razaak said.

The Alliance to Save Energy, an energy-efficiency advocacy group, says Energy Star-rated products can save consumers up to 30 percent off their energy bills, depending on the age of the equipment being replaced.

Home energy improvements can qualify for an income-tax credit that “can save you up to $500 on your tax bill,” said Ronnie Kweller, Alliance to Save Energy spokeswoman.

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