Branko Terzic
More good news yesterday for electric service customers.
The Commerce Department published the numbers it uses to estimate the gross domestic product. Including personal consumption expenditures, which is seventy percent of the GDP.
Including the expenditures for cars, clocks, carpet, computers, cereal, clothing, cosmetics, child care, cabs, clubs, cable, cell phones and casinos. That’s just the c’s.
And including the expenditures for electric service.
Steve Mitnick
Demand-side management programs are not new to the electric utility industry.
Arguably the most effective peak management tool was the invention of commercial and industrial interruptible service and tariff offerings. Electric utilities introduced effective residential peak shaving programs in the 1970’s as well.
I know. I had direct experience with one when I was a young and new public service commissioner in Wisconsin in the early 1980’s.
The Energy Department reports that the average residential rate for electric service was lower than last year in every month this year through August (the latest month of the data). Except this March.
It also reports that the average commercial rate was lower than last year in every month this year. No exceptions.
Year-to-date, the average residential rate was 12.54 cents per kilowatt-hour this year. That’s lower than last year, by 0.9 percent, when it was 12.65 cents.
Steve Mitnick
Last week, Donald Trump was elected President.
OK, you knew that.
By now, you’ve read the speculation about what this means for all the aspects of domestic and foreign affairs. Sure, the impact on trade, immigration and jobs might be important to some folks. But you care about what this means for utility regulation and policy.
First, it seems likely that natural gas production and pipeline development will maintain its pace if not increase. There will probably be less tolerance for the efforts of opponents. Though those efforts could become more confrontational.
Steve Mitnick
I was an early proponent of what has been called incentive ratemaking, price cap regulation or performance based ratemaking for public utilities. I’m cognizant it is not a new idea at all.
During the 1980’s, the government of the United Kingdom, under Prime Minister Margaret Thatcher, decided to privatize the nation’s utilities. The utilities had been nationalized in the 1940’s. The UK rejected the US regulatory model, selecting a variant with annual rate adjustment.
Nov. 16, 2016: This week it’s been the center of the universe. No, not Trump Tower. La Quinta of course, California’s host town for the NARUC Annual Meeting.
NARUC’s Winter Meeting in February and Summer Meeting in July are enormous gatherings of utility regulators and their fandom. But the Annual Meeting each November is the epic festival of regulation’s rock stars.
Steve Mitnick
Nov. 17, 2016: Yesterday, the Labor Department published October’s producer price index for numerous goods and services.
You’re likely most interested in what’s happened to the price of turkey. Thanksgiving is just a week away. Great news! Turkey’s price is down 16.6 percent from last year.
Suppose you’re also interested in electricity and natural gas price trends.
The PPI for residential electricity is up 0.2 percent from October 2015. For commercial electricity, it’s up 0.5 percent.
Steve Mitnick
Late last week, the Labor Department published October’s Consumer Price Index. The underlying detail shows consumer price trends for electric and natural gas utility service nationally and regionally.
Nationally, the overall CPI for all goods and services was up 1.6 percent over the last twelve months.
As is usual these days, the CPI for electric service lagged the overall CPI. CPI-Electricity was up 0.4 percent over the twelve months.
Steve Mitnick
Nov. 22, 2016: It feels like electric utility service is less costly than it was. This feeling, a reality, is backed up by Consumer Price Index trends.
The Labor Department has been tracking the prices of the goods and services that consumers typically buy, including electric service, since 1913. It’s interesting, though not too relevant to today, that electric service costs 4.6 times what it did in 1913, while consumer goods and services overall cost 23.9 times what they did back then. Comparing 2015 to 1913 annualized.
Electricity is far cheaper now.
Steve Mitnick
