Electric rates not falling along with fuel costs

[Omaha Steve]

Source: AP-Excite

By JONATHAN FAHEY

NEW YORK (AP) - A plunge in the price of natural gas has made it cheaper for utilities to produce electricity. But the savings aren't translating to lower rates for customers. Instead, U.S. electricity prices are going up.

Electricity prices are forecast to rise slightly this summer. But any increase is noteworthy because natural gas, which is used to produce nearly a third of the country's power, is 43 percent cheaper than a year ago. A long-term downward trend in power prices could be starting to reverse, analysts say.

"It's caused us to scratch our heads," says Tyler Hodge, an analyst at the Energy Department who studies electricity prices.

The recent heat wave that gripped much of the country increased demand for power as families cranked up their air conditioners. And that may boost some June utility bills. But the nationwide rise in electricity prices is attributable to other factors, analysts say:

- In many states, retail electricity rates are set by regulators every few years. As a result, lower power costs haven't yet made their way to customers.

FULL story at link.



Read more: http://apnews.excite.com/article/20120711/D9VUU4AG0.html

---

In this Wednesday, Sept. 10, 2003, file photo, the setting sun silhouettes electric transmission lines crossing Berea, Ohio. A sharp decline in the price of natural gas makes it much cheaper for U.S. utilities to produce electricity. It just isn't having any impact on homeowners' monthly bills. Instead of falling, electricity prices aren't budging. They are rising just as families begin cranking up their air conditioners. (AP Photo/Mark Duncan, File)

[Shadowflash]

1. Why does this cause him to scratch his head?

It's a no brainer. They have us by the short hairs and we have to pay what they charge.

[Red State Renegade]

2. pretty simple if you read the article

First the article says that only 1/3 of our electricity comes from natural gas which has been cheap. Most however is still supplied by coal fired plants which as we know has been hindered by our department of energy, thus raising the cost of a coal fired plant, nuclear is also a large source of our power.

Secondly the rates that are regulated generally are the cost of transmission and not the cost of the energy itself. This was changed many years ago due to wild fluctuations in the cost of energy. Most utility companys have at least two parts of their bill. One is the actual cost of the energy itself and the second is the cost to supply or transmission of the energy. that is the part that is still regulated, not the cost of the energy itself.

[FailureToCommunicate]

3. Well put. You should post more

More than you have that is.

[cstanleytech]

4. "coal fired plants which as we know has been hindered by our department of energy"

Please, enlighten us on how its all the fault of the department of energy oh wise one.

[NickB79]

11. The irony is that those fossil-burning plants are the cause of our heatwaves

Thanks to global warming, we need to burn more fuel to run A/C units.

Which causes more warming.

Which requires more fuel burning.

But don't worry, it's all the fault of the Dept. of Energy. If we just stepped back and let the coal plants burn unregulated, everything would fix itself

[Igel]

6. Along with a lot more.

Some's in the article. Some's not.

Want more solar and wind? Costs money to put them up. That money doesn't just fall from the sky, nor is the Federal government in charge of building the infrastructure.

Buried utility lines?

Replacement costs for downed power lines?

Buffer to keep the companies solvent when there's a spike in costs but regulators don't allow the full cost to be passed on to consumers?



Fun new for the day: Those in MD without power because of the recent derecho get charged something as part of "bill stabilization." As a service to consumers, who would otherwise see unreasonable swings in their electric bill, there's a cost that's passed along even when they're not being served.

[Marthe48]

10. I hope that some of the money I pay AEP is going for equipment

replacement and protecting the infrastructure, such as burying lines in vulnerable places. Which if it were done on a schedule, would stimulate factory production of equipment, employ people, update the transmission of power and stabilize the grid. Oh wait, I forgot about the bottom line, silly me.

[go west young man]

5. This is the true effect of U.S. crony capitalism over the long term.

Republicans deregulate everything for their buddies and then dismantle gov't utilities and sell them off to others who then jack up rates making them more expensive than if they were gov't run and properly regulated. It's happened in all areas. Hell you can even see it in the fact the post office is much cheaper than UPS and Fed Ex. Competition doesn't guarantee lower prices either. Capitalism is one big failure these days especially after the 2008 big bank robbery.

[saf0828]

8. electricity prices

I have read from an article that the reason for electricity prices not falling along with fuel costs is that mintaining the power grid, as in power lines and transformer stations, and so forth, is expensive and those costs have been going up in recent years. In some areas, it has gone up so much that drops in natural gas, oil or coal costs is erased.

[truthisfreedom]

9. Very simple.

Trying to destroy any possibility of electric cars. Period.
But the end of gasoline is near.

[kaylee0105]

12. possibility

People usually use what they know is helpful for them. If electric cars are not being truly accepted by the people, it will eventually die down.