Just as gasoline prices push to near record highs, PECO Energy's (serves all of Southeast Pennsylvania) electricity prices are falling back to where they were 16 years ago, proving again that theres is more good energy price news than bad. Declining electricity rates and natural gas bills remain one of the primary reasons why high gasoline prices are not stalling the economy.
PECO Energy's 12% to 19% price cuts, starting July 1, mean that electricity generation prices are back to 1996 levels, when Pennsylvania enacted a law ending state-sanctioned generation monopolies. In real or inflation adjusted dollars, electric generation prices are down about 40% for most customers, including a residential customer living on Social Security.
Many residential customers would be paying about $320 more per year had electricity rates in 2012 just matched increases in the Consumer Price Index since 1996. Cumulative savings since 1996 reach thousands of dollars.
Following the passage in 1996 of Pennsylvania's Electricity Competition and Customer Choice Act, the Pennsylvania Public Utility Commission broke the old monopoly electric rate into generation and distribution pieces--sometimes called unbundling the rate--and assessed the generation portion (including the uneconomic or "stranded" generation plant) of the residential rate to be 8.6 cents per kilowatt-hour. On July 1, the PECO Energy residential price will be 8.87 cents per kilowatt-hour, with some lower offers from competitive suppliers.
Indeed, 27% of PECO Energy's 1.6 million customers have shopped for electricity, and some are paying less than the PECO Energy default rate of 8.87 cents per kilowatt-hour.
Most commercial customers have fared even better than residential customers since 1996, and savings in inflation adjusted or real dollars for commercial customers can exceed 40%.
All this adds up to a big stimulus for Southeast Pennsylvania and the Commonwealth.