Electric generation prices in August were at their lowest point since August 2004, twelve years ago
Late last week, the feds dumped a wealth of August electric price data on our desk. This week, we’re filling you in, on what it all means for utility policy and regulation.
There’s too much to fit in a single column. See Monday’s column for Consumer Price Index trends in residential electric rates, by region. See yesterday’s column for Producer Price Index trends for electric generation, transmission and distribution in aggregate.
Here today is another taste. To get the full story, catch all the columns this week.
The Consumer Price Index tracks, among other things, the prices charged by utilities and paid by residential customers.
The Producer Price Index tracks, among other things, the prices charged by utilities and paid by industrial, commercial and residential customers. For industrial and commercial customers, electric utility service is a factor in their production.
The PPI even breaks out and tracks the prices of our electric generation, transmission, and distribution stages of production.
The prices charged in August by our electric generation stage of production were at their lowest point since August 2004. That’s twelve years ago.
The PPI for electric generation stood at 131.2 this year, in August. It was 135.5 last August. It was 140.2 two Augusts ago.
So electric generation prices have fallen by 6.4 percent over the last two years.
The PPI for electric generation was as high as 155.6 in August 2011. It was as high as 163.3 in August 2008.
In plain language, electric generation prices are down by 15.7 percent since 2011. And prices are down by 19.7 percent since 2008.
The prices charged in August by our electric transmission stage of production were, on the other hand, not at their lowest point.
The PPI for electric transmission stood at 158.7 this year, in August. It was 153.4 last August. It was 149.7 two Augusts ago.
So transmission prices were up by 3.5 percent over a year ago. And up by 6.0 percent over two years ago.
Fortunately, transmission costs are by far the smallest slice of consumer prices for electric utility service, relative to generation costs and distribution costs.
The PPI for electric distribution stood at 148.2 this year, in August. It was 149.8 last August. It was 147.1 two Augusts ago.
So distribution costs were down by 1.1 percent over a year ago. And up by 0.8 percent over two years ago.
Tomorrow’s column will look at long term PPI trends for the residential, commercial and industrial customers.
Hint. The PPI for residential and commercial electric service have generally lagged well behind the overall CPI for all goods and services.
Number-crunching courtesy of the industry’s data nerds at Public Utilities Fortnightly.
Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
E-mail me: mitnick@fortnightly.com
