Average US power price jumps 5.2%, more increases are likely: NUS

Average US power price jumps 5.2%, more increases are likely: NUS

Washington (Platts)--17May2005


The average US electricity price rose 5.2% between April 2004 and April 2005
and prices are likely to continue to increase over the next 12 months, perhaps
reaching "historic levels," independent consulting company NUS Consulting said
Tuesday. The Park Ridge, New Jersey-based company said that according to its
annual survey, the average price of power in the US was 7.95 cts/kWh in April
2005, compared with 7.56 cts/kWh a year earlier. NUS surveys 24 of the largest
investor-owned utilities in US, using an industrial model of monthly usage
totaling 450,000 kWh with a monthly peak demand of 1,000 kW. 

NUS said it found customers in New York, New Jersey and California pay some of
the highest electric prices. The top five surveyed utilities in terms of price
are Consolidated Edison at 14.84 cts/kWh, Niagara Mohawk at 11.97 cts/kWh,
Southern California Edison at 11.45 cts/kWh, Pacific Gas & Electric at 11.31
cts/kWh, and Public Service Electric & Gas at 9.90 cts/kWh.

The largest price escalation over the past year occurred in Maryland where
Baltimore Gas & Electric increased its prices by 33.7%, NUS said. Other
utilities with double-digit increases included Con Edison at 15%, Reliant
Energy at 13.3% and Texas Utilities at 12%. The survey found the lowest priced
utilities included Ohio Power at 4.70 cts/kWh, Dominion Power at 5.18 cts/kWh,
Duke Power at 5.28 cts/kWh, Alabama Power at 5.37 cts/kWh and Ameren UE at
5.46 cts/kWh. 

NUS said the five highest-priced utilities operate in what are considered
deregulated electricity markets. While California re-regulated its electricity
market in March 2002 retroactive to September 2001, customers buying
electricity on the open market before that time could still purchase
competitive supply after March 2002. All the utility companies reporting
double-digit increases have also opened their electricity markets to retail
competition, NUS added. Four of the five lowest-cost utilities currently have
not deregulated their electricity markets--the exception being Ohio Power.

"As world energy prices continue to rise, the US electric industry will
reflect this growing trend," said Richard Soultanian, Co-President of the NUS
Consulting Group. "This year's increase of 5.2% is one of the highest recorded
for the US and there is little sign that future electricity prices will abate.
As much of the electricity in the US is generated using natural gas and this
commodity is so closely tied to world oil prices, electric rates are bound to
continue to climb ever higher. Additionally, we currently have indications
that electricity prices over the next twelve months should increase further,
perhaps to historic levels."

This story was originally published in Platts Electricity Alert
http://www.electricityalert.platts.com

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