Lower Energy Prices Could Mean Lower Electric Bills For Consumers, Or Maybe Not

Having trouble paying your high power bill? The law of supply and demand may be your friend. Americans’ electricity use is decreasing for the first time since 1949. (Maybe it’s all those compact fluorescent bulbs.) This means that your electric bill could be slightly lower in the coming months…or at least not increase as much as usual.

How does that work? Prices are falling on the wholesale energy market, but some all local power companies purchase their power far in advance to insulate themselves against rising prices.

If you reside in the Northeast, West or in a central state like Texas where rates are based on spot prices, you stand a good chance of getting some relief.

Customers in more regulated markets or in spots where utilities calculate bills based on long-term contracts will not benefit so much. In those markets, rates tend to be more stable.

A decrease in industrial electricity use, and relatively milder weather nationwide, not consumer light bulb preferences, account for most of the decrease.

Demand for electricity sputters and bills may fall [AP]

(Photo: frankieleon)