As we said in yesterday's column, the Labor Department just published December 2016's Consumer Price Index. The CPI for all consumer goods and services was up 2.1 percent from the prior December. The CPI for residential electric service was up 0.7 percent.
The wide gap between the CPI for all goods and services and for electric service, 1.4 percent, means the real price for electricity fell significantly.
The fall in the real price for electricity is clearer when we look historically as well as regionally.
Nationally, the CPI for all goods and services increased 3.89 times from December 1977, the first year of regional data, to December 2016. The CPI for electric service increased 3.56 times.
Residential electricity presently averages around 12.5 cents per kilowatt in the U.S. If it had increased at the rate of general inflation since 1977, the average would be around 13.66 cents per kilowatt-hour, over a penny higher.
In the South, the CPI for all goods and services increased 3.80 times from December 1977 to December 2016. The CPI for electric service increased 3.33 times.
Residential electricity presently averages around 11.0 cents per kilowatt in the South. If it had increased at the rate of general inflation since 1977, the average would be around 12.58 cents per kilowatt-hour, over a penny and a half higher.
In the Midwest, the CPI for all goods and services increased 3.68 times from December 1977 to December 2016. The CPI for electric service increased 3.30 times.
Residential electricity presently averages around 12.5 cents per kilowatt in the Midwest. If it had increased at the rate of general inflation since 1977, the average would be around 13.95 cents per kilowatt-hour, nearly a penny and a half higher.
In the Northeast, the CPI for all goods and services increased 4.04 times from December 1977 to December 2016. The CPI for electric service increased 3.31 times.
Residential electricity presently averages around 16.5 cents per kilowatt in the Northeast. If it had increased at the rate of general inflation since 1977, the average would be around 20.14 cents per kilowatt-hour, over three and a half pennies higher.
In the West, the CPI for all goods and services increased 4.03 times from December 1977 to December 2016. The CPI for electric service increased 4.87 times.
Residential electricity presently averages around 13.5 cents per kilowatt in the West. If it had increased at the rate of general inflation since 1977, the average would be around 11.17 cents per kilowatt-hour, over two pennies lower.
Unlike the other three regions, the price for electricity outpaced general inflation in the thirteen-state West. Factors might be the declining role of inexpensive hydro in the Pacific Northwest and energy policy in some states. Notably, California, Washington and Oregon have two-thirds of the region's population and weight in the regional CPI.
Number-crunching courtesy of the magazine for commentary, opinion and debate on utility regulation and policy since 1928, Public Utilities Fortnightly.
