Average regulated retail electricity price rose faster than inflation in 2009
Jersey City, N.J., August 20, 2010 — A recent special report from Regulatory Research Associates, a division of SNL Energy, reveals that the average regulated retail price of electricity rose in 2009 at a rate greater than inflation.
Using data from SNL Energy and the U.S. Department of Commerce, the RRA report shows that the average bundled price to ultimate customers in 2009 rose 2.1 percent to 9.87 cents/KWH compared to a 1.2 percent increase in GDP-PI, a real price increase of 0.9 percent.
Since 2004, in inflation-adjusted terms, prices have risen 15 percent to ultimate customers. Residential prices have also increased 15 percent, while commercial and industrial prices have risen 9 percent and 12 percent, respectively.
"There are several driving forces behind this phenomenon, including the expiration of restructuring-related generation rate freezes and the associated implementation of competitive wholesale procurement," said Lillian Federico, senior vice president at RRA. "Increasing environmental compliance costs, utility infrastructure investment, and rising employee benefit and health care costs have also played a part. As a result, we expect electric prices to continue to rise at a rate that exceeds inflation, as utilities seek recovery from regulators of these costs."
"Average Regulated Retail Price of Electricity: 2009 & Comparative Historical Data" provides details concerning the price paid for electricity by retail customers of the major investor-owned electric utilities in the United States during 2009, 2008, and 2007, and a broad overview of historical trends in electric prices back to 1974.
SNL Energy, a division of SNL Financial, provides comprehensive intelligence for the power, natural gas and coal markets through an online service that integrates news, data, analytics and research.
RRA provides independent research and consultation on electric utility securities and regulation, with a reputation for unmatched expertise in both areas. Acquired by SNL Energy in 2005, RRA remains the industry leader on regulatory issues affecting utilities.
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