Electricity prices are rising all over the country

Local utilities are trying to recover coal, gas costs

by Tom Stundza -- Purchasing, 6/18/2008 11:55:00 AM

Electricity bills are heading up even though demand is soft. So says Mark Cooper of Consumer Federation of America. In a USA Today newspaper story this week, Cooper points out that utilities across the U.S. are raising power prices up to 29%, mostly to pay for soaring fuel costs, but also to build new plants and refurbish an aging power grid, and even more dramatic rate increases are ahead.

Electric-power use grew by 1.9% in 2007.  But, this year, the Energy Information Administration sees slow growth (0.9%) in total electricity consumption. The reduced rate of growth is coming from slower economic growth, the imposition of new efficiency standards in 2007 and higher electricity prices. That’s mostly because of the explosive price of coal, the fuel for half of U.S. power plants, which has doubled since last year. The other fuel, natural gas, costs nearly 50% more. Atop that, the cost of building a power plant has more than doubled in less than a decade.

So, the USA Today story says the rising fuel prices are driving up utility bills all over the country. In Virginia, Potomac Edison plans to raise rates 29% on July 1. AmerenUE, Missouri's largest utility, recently asked for its first rate increase in 20 years, a 12.1% boost. Customers of Public Service Co. of Oklahoma were socked with a 25% rise on June 1. In California, Pacific Gas & Electric is seeking a 13% rate increase.