I don't believe the powers of supply and demand are relevant in the power industry.

No way where I'm at in Virginia we just had a second or third rate hike in the last two years. They claim its more expensive to produce.
Even though there is a dam that generates power and in the last few years replaced all the meters so they communicate wirelessly so there are a fraction of the meter readers then there used to be.

I live in the northeast, and last I heard my utility was looking to raise rates.

Supply and demand are only interrelated if there isn't a huge greedy middleman trying to get rich and please stockholders.

The only "supply and demand" stories I hear from the utility are when people are complaining about sky-high rates, in which case the utility always blames their rates on wholesale energy costs. Otherwise, when wholesale rates are low, they're busy trying to convince consumers that the high prices are due to distribution costs, storm damage, or stranded costs for projects they screwed up and want the rest of us to pay for.

Smart states are following Oregon's lead. Oregon decoupled energy distributors' profits from volume.

I just love the unfair rate hikes.

Residential consumers in my state saw an 9% rate hike last year while business accounts when up a whopping 15% OR MORE.

Usually business customers pay about double the residential rates. OR more is important because commercial customers with large spikes of consumption have even larger % rate increases every year. One friend said his employer was slapped with a 27% rate increase for electricity last year. Since electricity is like 2% of their manufacturing costs, the 27% rate increase had minimal effect on production costs so the company decided it was cheaper to raise product prices by dinky little % than fighting the rate increase in court.

Great, roll over and accept the arse screwing you are about to receive from the State utility commission.

The utility company has the usual justification about businesses costing more yada yada yada, except the utility companies keep asking the regulatory commission to rate apartment complexes and college dorms at the higher commercial rates.

WTF?

As a business owner I can see charging some businesses a higher rate (think industrial customers with big spikes of consumption are well justified paying a higher rate), but how in hell is an apartment complex justified to be charged the higher commercial rate than a single family home?

The utility regulatory commission keep striking down the utility company's request to charge apartments at the higher rates ... but the last vote was one short of changing apartments to the higher rate. Figure the utility company needs to bribe just one more official and apartments will be slapped with the higher rate structure.

PS: And no, I don't own an apartment complex or live in one. It is just another example of how stupidly unfair mega corps, semi-monopolies, and government agencies can go out of their way to screw their constituants and customers.

I'd trade more industry for higher electricity prices.

It's been a fairly mild summer and our electric bills with the AC have been under $100 each month, August was $80 for gas/electric.

What I don't understand is how my friends/family come up with HUGE bills ($200+) and they don't have AC. I wonder what kind of electronics they've got constantly running. Maybe it's that we don't leave lights on, have gas stove/dryer/heater/water heater that helps.

Yeah, they dropped in Texas. I think our old plan is about 14 cents, down from 16 cents in May. Not sure, since we switched plans (same power co) and went from 16 cents/kWh to 9.5 cents/kWh in a month. Neither plan was a contract. Several providers are offering <10 cent rates this summer, where last summer it was much more expensive.

we replaced our aging washer around july 4 2008 with a HE front loader, and noticed a significant drop in water usage (mostly because we no longer needed to run a second rinse cycle for every load)
next up, replace our 25 year old GE dryer... it gets louder by the month, and i'm afraid that it's either going to up and die, or burst into flames.

@☠Grяrяrяrяrя, portrait of a chickenwolfmoosepig.: Do you live in New Hampshire by any chance? I do, we have PSNH and last I heard the prices were being raised to recoup losses from the ice storm damage. Not sure how true that is, but that's what I heard.

@HiPwr: I'm not sure that makes sense. My point is that I'd give up cheaper energy if it meant more industry.

@Ragman: That's because we tried deregulation, letting CP&L/AEP have their way. CP&L jacked rates so badly the PUC had to step in to slap them hard, threatening to place rate tariffs and take back control of the pricing.

Yeah, I agree it's down, but it's politically driven. And it's not all the way down past the previous year's rates.

This year I've been wondering about the rates since several companies I know were jacked roughly 200% over their previous monthly bill.

@gStein: The loudness is most likely your vent hose getting plugged up and the dryer's fan is laboring to move air through it.

Invest in a duct brush and keep that vent hose clear.

Stating that your monthly bill was $xxx for electricity is meaningless without further info. You need to tell us what your usage was, and what your rate was. That's the only way people can compare your numbers with their own.

The elec bill amount at our old apartment was less than the bill amount for our house, but our house has a lower usage per square foot even though it's more than twice as big. Not to mention when it was 105 outside, the apartment a/c couldn't get below 85 and ran nonstop all day, but the house a/c will get it to 77 on a 100+ day.

My bill averaging is $320 a month based on a rate of 15-16 cents/kWh. Now that my rate is down about 40%, it should be around $200/month when they recalculate it. We use around 1100 kW on average for 2200 sq ft per month, not including a/c (our heating is all gas). A/c in a Texas summer can add another 2000 kW to our monthly usage.

Ours is raising rates. They have to build a new facility and do this, that, blah blah blah and winter's coming and gas prices will go through the roof etc. etc.

They SUCK and I wish I had the money for a new washer and dryer and a new furnace. I have an old floor furnace that sucks and will probably kill me someday, either by burning up or leaking carbon monoxide. Better yet, I wish I could move to someplace where I don't NEED a furnace!

@Ragman:
I'm also in Texas and have 9.5 cents/kWh plan. My bill was $102 before taxes and the (get this) $40 "You didn't use ENOUGH energy!" fee they tacked on. I have an all electric 1800 sq. ft home, which I know is a shoe box compared to most but when I hear about people having $300 utility bills it makes me happy that I went "bite size"!

@Nicole: yeah i think we'll be paying for that storm for like 5 more years.

@Starfury: it's also a function of how many people live in the house. we only have one AC, but we have 4 people living in the house (2 teachers, a grad student, and one unemployed person), during the summer the dishwasher is run 2x a day, i do 6 loads of laundry a month, my mom does like 4 times that, my sister does about 12 a month.

it adds up after a while.

@Nicole: Ice storm was nuts here in MA. We were without power for three days in very cold weather, but I heard you guys in NH got it much worse.

I remember the hurricane coming through Ohio last year and places going without power for 7-14 days. The electric comapnies answer to them not more than a week afterwards: We're raising rates to fix the storm damage. Now, after they get reimbursed for the the storm damage, will they lower rates back to market levels? Hell no.

@Weewolf: Yeah, almost all power companies are statutory monopolies (that is, it's illegal to compete with them), so they tend to absorb lower prices into their profits. At least they absorb the part that isn't a dead weight loss.

They'll never lower the prices, especially in this economy.

Most likely this is one of those businesses that decides ahead of time exactly how much profit they are going to make, and then set prices to make sure that target is hit.

@Johnny83: Well and to come back to my thought. I think supply and demand only works when there is competition. I don't have 2 other power companies to choose from and they know that.

@Nicole: Yes I do, and yes, I think PSNH is actually already recovering some of the ice storm damage right now but they want more (plus, they have to turn a healthy profit and keep those shareholders happy).

All I know is that my PSNH bill never ever seems to go down, even when electricity is cheap. They're still arguing about the pollution upgrades to the ancient coal-fired plant in Bow, so I'm sure when they get that resolved, we'll get a nice rate hike to pay for that too.

I think PSNH puts off major upgrades and maintenance until electricity is cheap and they take advantage of that because nobody really ever expects rates to go down, so they use the excess profits to fund repairs.

You guys all just made me want to log in to check my electric bill so I did. 1442 KWH for the month of August (actual reading not estimated) and $125 bill post all taxes and fees. Which comes out to $0.086 per KWH including the sales tax, delivery fee and all that other junk. Not too shabby. I live in Indiana.

@StanTheManDean: I remember when Enron, Dynegy, etc. were unfairly manipulating California's energy costs. We had "shortages", that turned out to be fixed energy trading schemes. When electric users banded together and cut back usage, Dick Cheney scoffed - because of course he wanted to drill offshore and build more nuke plants.

Eventually we found out we'd been gamed. No one else in the country gave a damn though.

Now it's your turn. Enjoy it.

i managed to cut my power bill a HUGE chunk [$88] in the most recent bill - two a/c units, programmable thermostat isn't currently an option, so i just kept trying to remember to change the living room one up when going to bed and the hallway one on my way out to work in the morning [average daily temp for august was same as july here also]

but progress energy has a bill comparison tool that makes it easy to see the individual charges and the rates

energy rate change from june going into july:
Avg kWh Rate $.1093 $.1090 -$.0003

energy rate change from july going into august:
Avg kWh Rate $.1090 $.1102 +$.0012

went down a tiny bit and then up a good bit more.

and especially with that rate increase i am very glad to see the numbers showing my decreased average daily cost from july's bill to august's bill:

Avg Daily kWh Cost $8.46 $6.66 -$1.80

@Nighthawke: @gStein: yup, i second that. i kept a dryer running until it was about 35 years old [my mom was the original owner]

@catastrophegirl: @gStein:
stupid thing wouldn't let me finish:
although if the loudness is a banging, it's quite possible that your belt is slipping due to age or looseness and is wrenching the drum around. which is a simple fix. pop off the bottom panel and lie on your back with a flashlight and turn the drum [unplug it first!]
i've never seen a dryer drum without a line on it where the belt should align. if it's not, move the belt to line up. if the belt feels loose and you can move it easily, you either need to adjust the tensioner or get a new belt.
a dryer belt costs less than $20 and it helps to have two people to install it but one person CAN do it if you don't mind holding the drum up with your feet while you work. [i didn't say it was pretty, or easy to do by yourself. just that it's been done]

1600 square foot home. 2 people. No a/c running (as I am unemployed, only fans have been allowed this summer).

All electric except for the oil furnace which also heats the water.

So, here are the particulars of the Con Edison (New York City) bill I got last month. Covers 31 days.

Supply 650 kWh @12.4800¢/kWh $81.12

Charge for the electricity supplied to you by Con Edison.

Merchant function charge $3.25

Charge associated with procuring electricity, credit and collection related activities and uncollectible accounts.

GRT & other tax surcharges $2.03

Taxes on Con Edison gross receipts from sales of utility services and other tax surcharges.

Total supply charges $86.40

Basic service charge $15.12

Charge for basic system infrastructure and customer-related services, including customer accounting, meter reading and meter maintenance. A billing and payment processing charge of $0.94, which may be avoided by switching to an energy services company (ESCO), is also

included.

Delivery 650 kWh @8.5354¢/kWh $55.48

Charge for maintaining the system through which Con Edison delivers electricity to you.

SBC/RPS charges @0.2908¢/kWh $1.89

The System Benefits Charge/Renewable Portfolio Standard charges fund New York State renewable energy, environmental and other related public policy programs.

Temporary NY State Surcharge @0.3785¢/kWh $2.46

Covers new fees imposed by the state.

GRT & other tax surcharges $3.66

See earlier definition.

Total delivery charges $78.61

Your sales tax

Sales tax @4.0000% $6.60

Tax collected on behalf of New York State and/or your locality. Buying your energy from an energy services company (ESCO) will lower your sales tax.

Total sales tax $6.60

Total electricity charges $171.61

The various power companies work off of a cost plus type of situation. They essentially pay costs plus a percentage profit. This tends to make the companies inefficient because they have an incentive to increase costs because it means more money for the companies. There are ways to encourage reductions in cost but they are rarely used in a meaningful way. In this case some of the costs will come down, but they will play by gas station rules and raise costs immediately when costs go up and bring down costs after they have sold off their old supply. It is a legal form of gouging.

There are two credible lines of reasoning though when it comes to power companies. One line suggests that the regulation and keeping power companies under the government thumb raises cost because there is no incentive for them to become more efficient. The other argument suggests that because the start up cost is so high and that the companies that are producing power have done so with government money to begin with they have natural monopolies and since the demand for power is nearly %100 because of its importance and the suppliers are low the cost will go up significantly if the power producers are deregulated. I tend to think the later is more correct.

Usually what happens is this:

Step one: Because of a drought/heat wave/evil doers we need to conserve water/electricity/oil.

Step two: People actually use less water/electricity/oil, lowering their monthly bills.

Step three: The companies complain that they are not making enough money now that people are spending less on water/electricity/oil, and they lobby to raise their rates.

Step four: Profit.

Step five: When the crisis is over, conveniently forget to lower your rates to pre-crisis levels.

Step six: Profit.

Step seven: Do nothing to address the inherently unsustainable nature of permanently wasting water/electricity/oil so that steps one through six can be repeated.

Step eight: When catastrophe or tectonic shift changes the market, use free taxpayer money to pay for your upgrades and/or maintenance issues that you didn't pay to keep up with. Be sure to request tax cuts for yourself and/or contractually guaranteed profit margins, and don't forget to praise the "free market".

They're still itching to raise rates here in PA 50+% once the rate caps come off, lower costs be damned.

The problem with this is that the utilities will then claim that they aren't making as much as they used to, so they can't rely solely on charging for usage, and so they will ask to jack up the price of just having service.

@EtherealFlame: Hey, my house is 1800 and I think it's plenty big. Our bill was $200 last month but our neighbors with the same size house complain of $500+ bills in the summer. I can't imagine what they're doing over there!

@Weewolf: They do at the wholesale level, but at the retail level, where most of us care about it, you are right for the most part.

Any supply/demand effect on retail is going to be something long-term, e.g. New York City has expensive electricity due to high demand and low supply; Buffalo, NY has low electricity prices for the reverse reason.

Day-to-day and month-to-month changes in the supply and demand, however, aren't going to be visible to the end-user's price, to be sure.

On another note, I think part of the drop in demand has been the weird weather this summer. Up here in upstate New York, we've had maybe two weeks of summerlike weather all summer. We've barely run our air conditioner, choosing to use fans to cool the house instead. The outside air has been cool enough most of the summer to do this. I've saved about $100/month for three or four months compared to last year that way. August has been the only month that was in line with previous years.

In SE Wisconsin, WeEnergies has announced that due to decreased usage, they'll be asking the PSC for a rate hike. That's right - they're not making enough money due to lower use, and they want to increase our rates. That's a pretty sweet deal, don't you think?

Meanwhile, the same company continues to show how we should use CFLs, etc., to reduce power use. No matter what that impact will have it means nothing to them - they'll get their money no matter what.

Do not conserve power! The trick is when consumers use less, the utility whines to the regulators and claims their revenue is down. They get a rate hike and us consumers loose again due to conservation efforts. Therefore, do not use CFLs and use your air condition all you want. You will save us all from yet another rate hike sooner than otherwise.

In MA the rate is over 0.21/KWH! This includes all the none sense transmission fees and stuff they put on the bill. If your bill is below $100/mo, then you use practically no energy!

@PDQ2: But Enron was Free Market, baby. Sensible regulation or punitive clawbacks on Exec pay would have been Socialism. And Uncle Dick was too busy protecting us from Terrorists to halt wholescale shutdowns of our most economically dynamic and populous state (who were pinkos anyhow).
What's next, you're going to suggest that our booming mortgage industry requires a closer look? Are you trying to wreck our booming economy? Why do you hate Capitalism so?!

@StanTheManDean: Business and consumer segments often have different pricing tiers, some lower, some higher. Why is this different?

@henrygates:
$500??? Some people really need to stop doing cryogenic experiments in their basement! Either that or stop growing whacky tobaccy! *grins*

@EtherealFlame: Things like dirty ac coils, lot of sun exposure, dirty filters, keeping the thermostat set to "meatlocker"... all that can add up.

But setting the thermostat on 72 AND running grow lights? Sheesh... thats like putting a humidifier and a dehumidifier in the same room and letting them fight it out. ;-)

I changed out a friend's standard fiberglass filter (the cheap 30 day MERV 1 stuff) that was soo dirty it was bowed up and on the verge of imploding. Hate to think what that was doing to their bill.

@nygenxer: I am happy to see that I'm not the only one thinking like that. Thanks for taking the time to write it all out. The water folks here in NYC said exactly that when explaining the huge hikes they've passed on to us.

@vastrightwing: If you take a look at my bill's breakdown (it's on page 1 of the comments) you'll see that for my 650 KWH, my rate comes out to $0.2640/KWH after all the taxes/fees/surcharges/supply-fees/delivery-fees/and-whatever-else-they-take-from-us are added in.

Less in Texas but you'd have to realize our "open" market. 18 cents kwh last fall to around 12 cents kwh as of now. It's a reducation but prior to uncapping everything, we use to pay 8 cents kwh.

@Ragman:
I keep my thermostat set to about 78ish but never at morgue like temperatures. I physically can't handle the sudden change in temperatures when I step out side on a sweltering day. If I go from semi-artic to seventh circle of hell that fast I get ill. Damn this pasty heat absorbent complexion!
LOL @ the imploding filter! I will shamefully admit that I have been guilty of having filters so dirty that I was positive it housed new microscopic life forms. What taught me to change them out was that in our last apartment, they were installed in a ceiling vent. Well, I decided after about 3 days of not figuring out why it wasn't cool in my rinky dink apartment to check the filter. Climbed a chair, opened the grate and got a filthy, disgusting filter that probably had not been changed all winter right in the face. Lesson learned. ICK!

@nybiker: Ouch! My God! They hit you will all kinds of stupid fees. But I still think our rates are sky high. Bananaboat in Texas is better, but his rates will be creeping up too. Is it time to put in solar cells yet?

@nybiker: No problem; thanks for the support - too many times I feel like the only guy saying, "The emperor has no clothes!"

@nybiker:

Where we live in NY it's been cool enough that we've only had the air on a few days. So the last two bills we've had, our "delivery charge" is more than the bill for the electricity. The month we didn't run the air it was twice the electricity charge.