U.S. Residential Electricity Prices Trending Up

Residential electricity rates have risen 1.93% from 1992 to 2010 on a compounded annual basis, which compares favorably with the rate of inflation over the same time frame. Nevertheless, the trend remains up.  From Texas to California to Tennessee, concern over rising rates remains high.

The chart below from The Energy Information Administration shows the monthly average electricity rate in the U.S. from 2000-2010 with projections through 2012.  Annual growth rates are graphed at the bottom.  Note the annual growth rate (not compounded growth rate) was much higher through the first part of the decade.  However, projections of 0.6% and 0.7% in 2011 and 2012 appear unusually low by comparison.

Added to the EIA chart is the red price channel.  Price channeling is a stock market charting technique, but used here to illustrate that electricity rate projections are predicted to remain near the bottom of the channel the next two years.  Is this a reasonable expectation?  Not likely.  In light of current expansionary monetary policies, price increases in the commodities and raw materials used in electric generation will push electricity prices above the 0.7% expected increase.

Electric power industry lobbying expenses 1998-2010

If money talks, then electric utilities have been some of the loudest voices in Washington over the past decade.  Electric power utilities ranked third in the nation in lobbying expenses over the period from 1998-2010, according to OpenSecrets.org, a non-partisan group which tracks the influence of campaign money on elections and public policy.

Over the 12 year period, electric utilities spent $1.42 billion on lobbying, topped only by insurance at $1.5 billion and pharmaceuticals at $2.08 billion, according to OpenSecrets' website.  In 2010 alone, the industry spent $191 million, employing 902 lobbyists in the process.  PG&E Corp. was the biggest lobbyist in 2010 spending $45.4 million, followed by Southern Co. ($13.2 million), Edison Electric Institute ($13.1 million), American Electric Power ($10.3 million), and Duke Energy ($6.5 million). 

The following charts show industry level spending since 1998, plus expenditures of the industry's three national trade associations.

Electric Industry Lobbying Expenditures

Edison Electric Institute

National Rural Electric Cooperative Association

American Public Power Association

Chart and Data Source: OpenSecrets.org

Employment projections in electric power industry

The electric power industry is shrinking in terms of total employment and will decline further if Bureau of Labor Statistic employment projections hold.  The data survey is conducted every ten years and covers total employment in the generation, transmission, and distribution (GTD) sectors of the industry.  Natual gas and water utilities are not included in the following employment projections.

Total power industry employment has fallen from 443,800 in 1998 to 404,700 in 2008.  BLS projections estimate the industry at 345,700 employees by 2018. 

On an absolute basis, the changes in industry employment from 1998 to 2008 is a net loss of 39,100 jobs.  By 2018, the industry employment level is expected to lose another 59,000.

The final chart shows the annual growth rate in employment in the electric power industry.  Employment prospects are not as promising as other industries.  From 1998 to 2008, the annual employment growth rate was -0.9%.  Unfortunately the decline will accelerate to -1.6% during the 2008-2018 period. 

Data Source

Related Link: The employment projections 2008-2018

Idaho project triples wind generating capacity, state ranks 15th nationally

The largest wind generation project in Idaho history is now complete and delivering power to Idaho consumers, according to local sources.  The wind farm is a joint venture between GE Energy Financial Services and Exergy Development Group, Atlantic Power Corporation and Reunion Power. 

The $500 million project will provide 183 megawatts of capacity, up from the state's current capacity of 60 megawatts.  Texas leads the nation in wind-generation capacity with 1841 megawatts according to January 2011 data from the Energy Information Administration (data available through October 2010).  Idaho's ranking in wind generating capacity moves to 15th in the nation with the new project, up from 23rd.  From Ocotber 2009 to October 2010, Idaho increased wind generation capacity by only 27 megawatts, an 82% increase.  However, the addition of 183 megawatts reflects a 305% increase. 

Nationally, wind generating capacity continues to increase.  Capacity increased 16.9% in the past year from 6,814 megawatts to 7,953.  However the bulk of the increase came from independent power producers (IPP),  like the Idaho project, rather than traditional electric utilities.  The following chart breakdowns the past year's growth in capacity by sector.  Traditional electric utilities increased their wind generating capacity by 11.7% in the past year, while IPPs increased capacity at an annual rate of 17.7%. 

Data Source

Colorado electric consumers have third lowest residential bills in nation

There is an interesting article in the Denver Post Sunday titled, "Xcel electricity rates up 21 percent in Colorado."  Although accurate, the article is misleading.  It creates the impression electric utility rates in Colorado are high and getting higher.  By Colorado perspectives, rates are rising.  From a national perspective, many states would be happy to swap places with Colorado. 

The paper reports Colorado residential customers pay an average of $68 a month for electricity.  Although the article mentions that Colorado's rates remain below the national average, it fails to mention just how far below the national average.  When looking at rates only, Colorado ranked 29th in the nation in lowest residential rates, with an average residential retail price of 11.19 cents/KWH compared with the national average of 11.62.  However, the residential consumers in Colorado pay some of the lowest bills in the nation.

According to 2009 data from U.S. Energy Information Administration, the latest for which monthly bill information is available, the Colorado average residential bill of $68 a month ranks as the third lowest in the nation.  Only New Mexico and Utah, with average residential bills of $64.30 and $66.16 respectively, rank lower.  The average monthly bill in the Mountain Division of the Census region is $89.38.  The region includes Arizona, Idaho, Colorado, Montana, Nevada, New Mexico, Utah, and Wyoming.  Colorado's average monthly bill is 23% below the regional average and 34% below the national average of $104.52.  Even if Xcel were to raise its rates another 20% over the next six years as Xcel proposes, the average monthly bill would be only $82.43, still far below the current national average.