Slowdown Seen in Electricity Prices
By Steven Johnson | ECT Staff Writer Published: December 11th, 2012
Ratepayers are getting a bit of a break on the price of electricity, according to the latest government analysis.
The Energy Information Administration said Dec. 11 that it expects residential retail electricity prices will increase by an average of 1.2 percent this year, and by 1.6 percent in 2013.
That’s a sharp dip from the 2007-2011 period, when residential prices jumped by an average of 2.4 percent every year.
In its Short-Term Energy Outlook, EIA anticipates prices across the country to average 11.86 cents per kilowatt-hour in 2012, and to rise slightly to 12.05 cents per kwh in 2013.
Prices in the industrial and commercial sectors also are holding steady, and the 2012 numbers actually will decline from 2011, EIA said.
The agency said the average industrial sector price of electricity was 6.82 cents per kwh in 2011. It will dip to 6.67 cents per kwh in 2012, then hop up to 6.80 cents per kwh in 2013.
EIA projected prices for commercial accounts for 2012 to be 10.12 cents per kwh, a slight dip from 10.23 cents per kwh in 2011. That will increase to 10.28 cents per kwh in 2013, the agency predicted.
EIA attributed the price drops to cheap and plentiful natural gas. Producing power from natural gas will cost generators just $3.46 per million Btu in 2012, or $1.27 per million Btu less than in 2011.
As a result, natural gas now accounts for about 31 percent of electric generation, EIA reported. The agency indicated that will decline in coming years, if the cost of fuel starts to increase.
The average prices fail to account for regional variances.
For instance, the average retail price of electricity for New England residents will be 15.62 cents per kwh in 2013, though that still marks a 0.25 cents per kwh drop from 2011. In contrast, residents of the Mountain West will pay about 11.19 cents per kwh in 2013, EIA said.