Survey: Electricity costs up, ability to pay down

Survey: Electricity costs up, ability to pay down When Wednesday, Jun 9, 2010 GMT-05:00 Where http://www.stlouisrenewableenergy.com Who • Scott's Contracting • scottscontracting.renewableenergy@blogger.com

--> Washington, D.C., June 7, 2010 — About 85 percent of state energy regulators responding to an annual survey expect the cost of residential electricity to increase next year, according to the Deloitte Center for Energy Solutions.
The survey, which Deloitte conducted earlier in the spring, also found a growing number of surveyed regulators fear rate increases will be financially onerous on the public.

More than a third (34.3 percent) felt that consumers would not accept any rate increase at all — up from 23.3 percent one year ago. Moreover, while 53.3 percent of surveyed regulators last year said that the public would accept a five percent rate increase, this year that number dropped almost 20 percentage points to 34.3 percent.

"Our survey demonstrates that state utility regulators are increasingly cognizant of electricity costs and the burden they represent on the average consumer," says Branko Terzic, energy and resources regulatory policy leader for Deloitte.
Terzic, previously a state regulator and a former commissioner with the Federal Energy Regulatory Commission (FERC), explains that most surveyed regulators (65.7 percent) expect rate increases because of rising environmental costs, while many (48.6 percent) also believe they will be linked to capital costs.

He goes on to point out that surveyed regulators see the high costs associated with renewable energy sources as an impediment to their adoption. "The vast majority of commissioners (68.6 percent) this year listed 'high prices to consumers' as the leading barrier to more renewable energy. This is a 10 point increase over last year's 58.3 percent number."

Exploring another issue that could have a dramatic impact on the consumer's pocketbook, Deloitte's survey looked at the regulatory preferences for 'time-of-day rates,' a concept that would allow utilities to adjust the rates they charge consumers throughout the day depending on demand peaks and dips.
Of the regulators responding to the survey, 60 percent reported that they were considering 'time-of-day' rates for their rate payers. And, when asked 'whether they believed that time-of-day should be considered,' 82.9 percent responded by saying 'yes.'

"Clearly," commented Terzic, "regulators are interested in time-of-day rates as way for the public to benefit from cheaper access to energy, especially in light of the current economic downturn."

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