Electricity prices

Thursday’s Hartford Courant brought good news for electricity consumers: “Many CL&P Customers To See Lower Rates Starting Jan.1” Electric rates will decrease 5.2 percent in January for most of Connecticut Light & Power’s 1.2 million customers, continuing a trend of declining electricity prices in competitive electricity markets as reflected in the state’s declining costs.

The rate reduction is a result of Connecticut’s participation in New England’s wholesale competitive market managed by ISO New England, a regional transmission organization. Consumers who shop for competitive energy suppliers in Connecticut have benefited directly from falling electricity prices in the past year – a trend recently noted by the Federal Energy Regulatory Commission.

A key Arizona legislator is pressing to reopen the state’s electric markets to full competition in order to spur job growth, reduce emissions, encourage innovation and reduce costs for consumers. Representative Lucy Mason of Prescott, chair of the House Water and Energy Committee, recently held a legislative forum that cited a report by the Goldwater Institute to urge competition in the state’s electricity market.

The Goldwater Institute report, Opening the Grid: How to Recharge Arizona's Electricity System for the 21st Century, was authored by two respected economists and finds that electricity restructuring has been successful in Britain, Texas and Pennsylvania, and would work in Arizona if the state’s electricity market was open to competition.

Last week’s regular meeting of the Federal Energy Regulatory Commission featured a staff assessment of the outlook for energy markets this winter, including the “exciting” development that natural gas and electricity prices have fallen to their lowest levels since 2001. Forward prices for natural gas this winter are significantly lower than at this time last year, and gas was placed into storage earlier this year for consumption during peak demand winter months at an average price of $3.45, nearly a third of the $9.40 average cost last year, FERC staff reported.

Retail competition in Illinois has increased significantly since 2006, the Illinois Commerce Commission concluded in its Triennial Report on Retail and Wholesale Competition in the Illinois Electric Industry issued this week. During a transition period in the state, which ended in 2007, competition was largely confined to the largest commercial and industrial customers of the state’s two largest utilities, Commonwealth Edison and Ameren. The new data shows substantial numbers of medium and small non-residential customers switching to competitive power suppliers.

Nearly all (93%) of the largest commercial and industrial customers of both ComEd and Ameren are buying power in the competitive market. The Commission found that the level of switching activity is noticeably increasing for small and medium-sized customers — 55% of ComEd’s and 38% of Ameren’s customer load under 1 megawatt is provided by a competitive supplier.