Course: GFM 102 Technical Aspects of Energy, Resources & Conservation

Reading

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Rate Structures

Electricity Costs??

Electricity costs vary from state to state and within states.  Electricity costs around the United States can vary by a factor of 10 depending on the state, location within a state, and by local electrical distribution companies (EDCs). Electricity can be low if the facility is located close to a hydro-electric plant. Electricity can be very high when served by nuclear plants or oil-fired plants in California, Hawaii, and the U.S. Virgin Islands.

In many areas, electricity costs have increased following de-regulation due to state PUC granting power companies the right to recover stranded investments from their rate payers (often called transition costs on the deregulated electricity bills). Many clients report their electricity costs increase by 10% to 15% following their state’s de-regulation of electricity markets.  Some electric utilities design their rates based on electrical demand peak (KW or KVA)… plus KWH consumption. Others tie their rate design to their true electricity generation costs (market based rates) and vary the KWH and KW cost based on the time-of-day and day of the week.

Some EDC have also added new fees for services traditionally included in the rate such as “line extension” fees for new electricity services.  In other cases there is new government required fees and taxes added to electricity bills. Some states also have ‘KWH taxes’ to fund state demand-side management (DSM) programs known as public benefit funds.

Click here to access the webpage on Time-Varying Pricing from Pacific Gas and Electric Company.