With crude prices as low as they now and heating oil/gasoline prices
much less than they were last year, can we poor schlubs here in the
Northeast have any hope that our electric rates will similarly decrease?
We're paying a residential rate of about 12 cents/kwh now.
I should have clarified that the 12 cents/kwh is the "generation rate"
we also pay about 6 cents/kwh for various "distribution" charges.
So, I payed about 18 cents/kwh last month.
I wouldn't expect the distribution charges to much affected by crude
If your electric company uses oil to drive their generation plants, a 50%
reduction in generation costs is not unreasonable. If they use coal, the
coal had to get their on freight trains that burn diesel, so a similar
saving should be in the offing. Natural gas rates should decline somewhat as
those with the option to use oil or gas make the economical choice.
Yes, you can expect big savings in your electric bill pretty soon.
Or maybe not.
Jeff, I'm surprised - we have 6 cents / kWh generation rate and my
bill w/ ca. 600kWh usage is like $ 60; I know CA has ridiculously
high electricity rates but I didn't realize NE has them so high,
too... Our hose has gas heating ( also water and cooking is ng) and we
expect our bill to run lower this winter; electricity usage in our
household is marginal during nonsummer months...
p.s. We live in NE Ohio ( Akron/Youngstown area)
From the link above^
Electricity Consumption. Total electricity consumption during 2008 is
projected to be flat at about 2007 levels, as slight growth in the
commercial and industrial sectors is balanced by decline in the residential
sector, primarily as a result of milder summer temperatures (U.S. Total
Electricity Consumption). Total electricity consumption is expected to
decline in 2009 due to the slow growth in new housing construction and
reduced demand in the industrial sector.
Prices. Spot prices for power generation fuels continue to decline from
their peak summer levels. Residential electricity prices are expected to
rise by 6 percent this year and by 5 percent in 2009
Yes, and as I ammended to my original post that 12 cents/kwh is just the
"generation rate". I took a closer look at my last bill on-line just now
and the 1844 kwh I consumed last month cost me 18.7 cents/kwh. Looking
at my previous consumptions I peaked at 4855 kwh consumed last January.
But, I have a pretty large "all electric" home with two heat pumps
running two zones of heating and AC. Course the heat pumps don't
contribute a helluva lot of heat at times like last night when the
outside temp was below 20 F, but that's when electric blankets come in
handy. <G> Our family business' office also uses heat pumps.
Thank G_d the heating oil prices have dropped to about 80% of what they
were this time last year. Heating oil prices wer up over $3.50/gal a
couple of months ago and I didn't know how a lot of folks could make it
through the winter.
One of my Rotary Club buddies is the Sales Manager for a local fuel oil
delivery company and last week he told me that he knew that some elderly
folks with old large oil heated houses who were living on fixed incomes
were dropping the heat in their homes as low as they could safely go
without risking pipes freezing and spending many a full day sitting
around on the couches at a nearby shopping malls reading books, chatting
with their contemporaries and "people watching".
While the price of Crude has an indirect relationship to other forms
of energy, that relationship does not have a proportionate effect on
the prices of those commodities. When oil prices go up, other energy
form prices will usually go up as well but not always. The same is
true when they come down. The issue of supply and demand will be the
real determining factor. The recessionary pressures combined with
lowering of demand are forcing the decline in oil prices right now.
That may not be the case with electric and natural gas prices although
natural gas prices are about 1/2 of what they were this summer. Let
the demand increase due to winter temperatures and the natural gas and
electric rates could both increase even while crude prices are
Depends on your utilities generation mix and how much you're paying in
adjustable fuel surcharges as opposed to base rates.
The fraction of the adjustable rate that is owing to oil will come down
some depending on where they are wrt long term contract expirations,
etc. IOW, I wouldn't expect a really large effect.
On Tue, 09 Dec 2008 17:23:31 -0500, Jeff Wisnia wrote:
Complete Wilde Donkey Guess:
Utility companies that generate electricity using oil (or coal) fired
steam boilers will usually sign long term futures contracts for energy
supplies like oil (or coal.) I suspect that the #2 oil being used during
December 2008 and January 2009 was contracted for back in August or
September; a 90 day lead time delivery contract.
Just like the electricity generated back in June and July (when gasoline
was over $4.25 a gallon) was probably purchased at the price of June
minus 90 days price (March '08 ?) Not that I am claiming your utility
company gave you any break last summer during A/C season, because I doubt
You probably won't see any benefit of the current drop in Wall Street
futures contracts for oil until sometime in the Spring of 2009. That is
provided, naturally, your Utility company is not going to claim some sort
of price equalization from the price squeeze from last summer.
My electricity rates have not gone up much when oil prices rose
meteorically, so I doubt they will fall from falling oil prices.
My most recent electric bill (PECO, Philadelphia suburbs) amounted to
14.62 cents per KWH. I remember paying around 11-12 cents per KWH at the
end of 1989.
PECO is "warning" (my words) in recent radio ads that their rates have
been capped, and will be uncapped in January 2010 (IIRC).
- Don Klipstein ( email@example.com)
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