Falling Electric Rates

Discussion in 'Economics' started by jeb9999, Feb 26, 2012.

  1. Electric rates in Pennsylvania keep dropping.

    "Reflecting lower natural gas prices, PPL’s quarterly rates for residential customers buying their power will drop from 7.769 cents per kilowatt hour to 6.935 cents per kilowatt hour starting March 1, bringing a savings of $8.34 for the typical residential customer using 1,000 kilowatts of power per month. Small-business customers will see rates decline from 6.775 cents per kilowatt hour to 6.387 cents per kilowatt hour.

    PPL customers have seen generation rates decline each quarter since rate caps were removed in January 2010. PPL customers were then paying 10.44 cents per kilowatt hour."


    http://www.timesleader.com/news/PPL_bills_go_lower_thanks_to_cheap_gas_02-22-2012.html


    That is a 33% drop in just over 2 years.
     
  2. piezoe

    piezoe

    Just one question. Why would rates falling well below the cap have anything to do with caps? What is the connection here, other than purely political of course. If I want to get rid of a bothersome cap, I'll just lower my rates and then say: "See, caps are not needed."
     
  3. piezoe

    piezoe

    Just one question. Why would rates falling well below the cap have anything to do with a cap being removed ? What is the connection here, other than purely political of course.
     
  4. One of the reasons for this is that Pennsylvania is one of the few states that has electricity competition. Homeowners in most areas of the state can choose which electric company to purchase electricity from. This competition leads to dropping rates.

    Compare this to North Carolina, where both Duke and Progress Energy which both recently allowed to increase their rates by over 8% by the state utilities board (read as bribed politicans). Every year it is once again an electric rate increase because North Carolina does not have competition between electric utilities; you are stuck with only one electric company for your home.
     
  5. Banjo

    Banjo

  6. Bob111

    Bob111

  7. and dang, let me say that all the rates are way down in the 7 to 9 cents per Kilowatt Hour range. The rates in our state are all 12 cents per KWh and up.

    I guess competition does work!
     
  8. It's been a rather warm winter.