In 1996, when Pennsylvania ended state-granted electricity generation monopolies and embraced electricity competition, Pennsylvania's electric generation rates were 15% above the national average. Even worse, residential electricity rates in the Pittsburgh and Philadelphia regions were often among the ten highest in the nation, driven up by enormously expensive new nuclear plants that were charged to captive ratepayers, inefficient power plants that converted just one-third of their fuel to electricity, and waste bred by monopolization. Those stratospheric rates were especially punishing to working families, those living on social security, and the poor.
The latest electricity rates from EIA for June 2012 show a great deal has changed for the better. Start with that Pennsylvania's electricity rates are down about 6% from June 2011 to June 2012. The drop in rates is a product of both fierce competition in the generation portion of the electricity bill as well as declining natural gas prices, new renewable generation in the regional power pool that is dampening wholesale market prices, and sharply increasing demand response and energy efficiency that moderates demand and in turn prices.
While lower gas prices, more renewable energy supply, and rising energy efficiency are downward pressure on wholesale market power prices across the country, only a minority of states have adopted a policy of retail generation competition and ending the generation monopoly. Electricity competition in Pennsylvania now has changed the state from one with electricity prices that were 15% above the national average to one with prices below the national average.
Pennsylvania's average electricity rate in June, 2012 of 9.91 cents was nearly 3% below the national average of 10.18 cents per kilowatt-hour. www.eia.gov/electricity/monthly/pdf/epm.pdf. No longer are electricity rates in the Pittsburgh and Philadelphia regions anywhere near the ten highest in the nation but instead are close to or even below the national rate average residential rate of 12 cents per kilowatt-hour. Electricity prices for commercial customers in the Commonwealth are also well below the national average, making our economy more competitive and attractive to investment.
Electricity competition is delivering lower prices to Pennsylvanians, as this data confirm, and also renewable energy, energy conservation services, and a range of electricity pricing plans like Direct Energy's popular Free Power Day plan. Here is a case where today is much better than the bad old days of 1996!