Reports Show Rates Decreasing in Competitive Electricity Markets Nationwide

After a short period of escalating electricity prices due to rising fuel costs, consumers in competitive markets across the country are seeing significant decreases in electricity rates, in some cases by more than 50 percent, as the costs of generating fuels have fallen from their recent historic highs.  Because competitive markets respond faster to price signals, customers in these markets see reductions in their rates much more quickly than in traditional regulated-monopoly markets.

"These developments should put to rest the shallow arguments suggesting that competitive markets aren’t working because electricity prices increase.  In any market, prices go up and they go down in response to fundamental market forces, and consumers benefit from competition in myriad ways beyond the simple metric of price," said Joel Malina, executive director of the COMPETE Coalition, an advocacy organization representing more than 280 electricity customers, suppliers, generators and other stakeholders.

For example, the New York Independent System Operator reported last month that electricity prices dropped 54 percent in New York since June.  This significant decrease was a direct result of falling fuel prices.  In Texas, residential electric price offers have fallen by over 28 percent since July 2008 when natural gas prices were at an all time high. Rhode Island’s Public Utilities Commission approved a decrease in National Grid’s electricity rates of about 14.6 percent and, as of March 1, Maine residents and small businesses should see their electricity costs drop by 10 percent.

In Pennsylvania, a state where competitive electricity markets and the expiration of below-market rate caps are currently under debate, the Pennsylvania Public Utility Commission recently released its quarterly price projection report with figures that reflect significantly lower market prices than those in assumptions released just last August.  The report provides general guidance on current market prices compared to the rate caps in place today, and shows an average decrease of more than 10 percent for each class of customers compared to the commission’s last projection in August 2008.

"We continue to see the many non-price benefits of competition, such as increased efficiency, cleaner generation and renewables, and now we have clear evidence of consumers experiencing strong price-related benefits as well.  For all these reasons, consumers are increasingly voicing their support for competitive electricity markets, as COMPETE’s surging membership clearly demonstrates," Malina said.

Complete information on the price reports can be found at:

New York Independent System Operator

Texas

Rhode Island Public Utilities Commission

Maine Public Utilities Commission