[Maru]

Source: https://www.forbes.com/forbes/welcom...uckduckgo.com/

As Energy Prices Fall, Why Are U.S. Electricity Prices Rising?

Over the past three years, oil prices have plunged. Ditto gasoline and diesel prices. As for natural gas, record high production levels have kept average prices low in spite of occasional short-lived regional price spikes caused by extreme weather.

So why are electricity prices rising?

The average U.S. retail price of electricity has risen every year since at least 2013 and is forecast to continue rising in 2016, according to the Short Term Energy Outlook released Tuesday by the U.S. Energy Information Administration.

So why?

Don’t blame demand because it isn’t growing. Indeed, many if not most utilities are selling less– not more – electricity than they used to sell. But then supply and demand is a different beast entirely in the heavily-regulated utility industry.



The divergence between electricity prices and prices for all other energy commodities is also evident in the Consumer Price Index reported by the U.S. Department of Labor’s Bureau of Labor Statistics. In the most recent release of the index, which includes data up to the month of September, the BLS reported that:

The energy index, which fell 2.0 percent in August, declined 4.7 percent in September. The gasoline index declined 9.0 percent following a 4.1 percent decrease in August . . . The fuel oil index declined as well, falling 2.4 percent after an 8.1 percent decrease in August. The electricity index, which rose in August, fell 0.5 percent in September. The index for natural gas also turned down in September, falling 0.3 percent. All the major energy component indexes continue to show 12-month declines. The electricity index has fallen 0.4 percent over the span, while the other indexes have fallen more sharply: Fuel oil has fallen 34.9 percent, gasoline has declined 29.6 percent, and natural gas has decreased 12.1 percent.

To reiterate, the price of every energy commodity included in the index except electricity declined in the double digits.

Is the divergence between energy and electricity prices attributable to wholesale electricity prices? That seems unlikely. Wholesale power prices tend to be more closely correlated with the price of natural gas than retail prices, especially in recent years.

On the other hand, several wholesale price spikes have certainly contributed to the electric pricing trend. Last winter, natural gas pipeline constraints caused power prices in New England to spike for a few months. During the previous winter, the Polar Vortex caused a similar spike in wholesale power prices in the mid-Atlantic region.

These regional factors have undoubtedly affected the national average price of electricity. But do they explain why the national average retail power price has risen every year for three (soon to be four) consecutive years?

I went to go renew my contract, and they'd jumped rates +2c/kW which is quite a lot... they said it was due to the Hurricanes and the unexpected cold snaps during the winter so they had to dip more into their reserves than was expected, hence price hike.

We'd really like to go solar, but I haven't met anyone who has done it yet.

[Toy Soldier]

The UK has been facing this issue for 10+ years, is it new in the US?

Over here they were supposedly sorting it out... But they haven't. Prices continue to soar when wholesale prices go up and then fail to come down when wholesale prices go down, meanwhile energy companies continue to make huge profits.

[Maru]

Originally Posted by Toy Soldier

The UK has been facing this issue for 10+ years, is it new in the US?

Over here they were supposedly sorting it out... But they haven't. Prices continue to soar when wholesale prices go up and then fail to come down when wholesale prices go down, meanwhile energy companies continue to make huge profits.

Ours have only gone up the past few years. I've been with this company for 4 years and they've never had a price hike like this... so I guess since they are a smaller company, they were just under-prepared for the market rates going up as they have.

Other companies (most of them much larger) are sending me fliers for rates comparable to what we were paying before.

California expected to mandate solar panels for new homes
http://www.foxnews.com/tech/2018/05/...new-homes.html

I read this today. Good news for those of us in free markets who want to see innovation and eventually lowering of costs in residential solar, but bad news for those people living there already who are trying to buy a home. It will probably increase the price of rent/selling price in older homes in those markets and so more expensive in the long-run in terms of cost of living... I like the idea of builders creating new residential green communities /w these features, but maybe not an entire state.