Market Prices Allow Electricity Costs To Fall For Mid-Atlantic Co-op Customers

Crediting lower electricity prices in the competitive market, two Mid-Atlantic electric cooperatives, Choptank Electric Cooperative and Delaware Electric Cooperative, announced electric rate reductions this week for their members. The co-ops said the reductions were possible due to a sharp decrease in the cost of electricity provided by their wholesale power supplier, Old Dominion Electric Cooperative.

Prices in PJM Interconnection’s competitive wholesale electricity markets, the regional transmission organization (RTO) in which the co-ops operate, have declined by some 40 percent in the past year, reflecting changes in fuel prices and demand. Other organized competitive markets have seen prices decrease by 50 percent, with some producing the lowest prices seen since 2004 and 2002, according to a Federal Energy Regulatory Commission staff analysis. Competitive electricity markets compel power producers to offer their electricity at prices that reflect their cost savings. These savings are immediately passed on to the cooperatives’ members.

Choptank members will see a reduction of $7.53 a month for every 1,000 kilowatt-hours of usage. Delaware Electric’s customers will see bills lowered by $9.04 every month, a slightly greater reduction credited to its “Beat the Peak” demand response program.

The co-ops in Delaware and Maryland illustrate the direct consumer benefits of a well functioning, competitive electric market – lower prices, and customer participation in the market through demand response programs.

Joel Malina | November 13, 2009