Rate Decreases Seen in States with Deregulated Electricity Markets
After a period of steady increases in
electricity prices nationwide regardless of state
regulatory structures, consumers in states with
deregulated electricity markets are beginning to see
rate decreases as the costs of fuel and other
commodities involved in electricity generation have
leveled off or decreased. Customers are benefiting from
the transparency and rapid responsiveness of deregulated
markets to changing conditions and as demand falls.
Below are just a few examples of falling electricity
prices in states with more open markets.
Customers of deregulated Western Massachusetts Electric
Company will see a decrease in their electricity bills
beginning in July as a result of offers from competitive
procurements, the company recently announced. Continued
drops in supply rates have resulted in four consecutive
price drops since October 2008. Beginning in July,
prices for residential customers will drop 27.5 percent
from current rates, while small commercial and
industrial customer prices will drop 24 percent.
According to the New York ISO, falling fuel prices and
electricity demand have also elicited a drop in prices.
For the month of April 2009, the average price of
wholesale electricity dropped 13 percent from prices in
March and almost 50 percent from prices in January.
Currently at $39.64 per megawatt-hour, average wholesale
electricity prices are at their lowest since May 2002.
A May 2009 electricity auction conducted by Ohio state
utility regulators will result in lower annual
electricity rates for customers of FirstEnergy Corp.
Those served by FirstEnergy subsidiary Ohio Edison will
see a 16 percent decrease, while Toledo Edison customers
and Cleveland Electric customers will see 12.6 percent
and 7.4 percent decreases, respectively. "We are more
than pleased that ratepayers in northern Ohio, many of
whom have been victimized by the economy, will benefit
from the outcome of this deregulated energy auction,"
PUCO Chairman Alan R. Schriber stated. "We're proud of
the way the auction was conducted and commend the
participants, the auction manager and our consultant for
making this such a success."
Ameren Illinois Utility customers will be paying less
for deregulated electricity this summer, after the
company announced an 8 percent drop in prices beginning
June 1. The decrease comes as a result of a sharp
decline in wholesale electricity prices following a
reduction in general energy demand. The average
residential customer will save approximately $100
annually under the new prices.
ComEd customers in Illinois can expect to see a drop in
electricity prices as big as 7.5 percent, or $6.36 per
month, beginning in June 2009. A dramatic drop in the
cost of electricity purchased through a deregulated
competitive procurement process is responsible for the
decrease in residential electricity prices.
Residential customers of Baltimore Gas & Electric will
see their monthly electricity rates drop beginning
October 1, 2009. Commercial and deregulated industrial
customers of BG&E could potentially see their rates drop
as much as 18 to 33 percent as a result of recent
competitive power procurements.
These recent rate reductions refute the claims of
critics that past rate increases were the result of
restructuring and were caused by wholesale competitive
markets. The reductions show that the earlier increases
were in fact the result of underlying market conditions
such as increases in fuel and other costs. Competitive
power markets reflect both rising and falling commodity
prices for generation inputs. When underlying market
conditions cause prices to rise, consumers are not kept
in the dark and instead can respond more readily than in
states with substantial time lags in how and when rates
are adjusted. The rate reductions in deregulated states
are in sharp contrast to rate increases that continue in
many states that elected not to restructure.
http://www.epsa.org/forms/documents/DocumentFormPublic/view?id=10261000000AD
Deregulated |
