How Much We're Paying Utilities


Utilities’ sales revenues were slightly down from prior year

Today in Fortnightly

The latest Energy Department data shows that how much electric utility customers are paying utilities is pretty flat.  Last year, through October 2015, utilities' sales revenues were 331 billion dollars.  That was slightly down from the prior year, for the same period, when sales revenues were 333 billion.

Yes, that prior year, 2014, saw record sales revenues.  2015 looks like it will have the second highest sales revenues in history, falling short of the record 393 billion in 2014.

Sales revenues would be higher but for two factors working to keep them lower.  One of these factors is the continuing de-industrialization of the country.  Sales to industrial utility customers were 56 billion dollars last year, through October, down 4 billion from the prior year.  Sales were up 3 billion to residential customers and down 1 billion to commercial customers, so the industrial sales fall drove the overall numbers.  At the pace shown in the first ten months of last year, 2015 looks like it will have a level of industrial sales in the range of what they were back in 2010, and back in 2007.  

Commercial sales have, in contrast, been growing rapidly in recent years, as the country further becomes almost entirely a service economy.  Utilities' commercial sales revenues are now consistently more than double industrial revenue, significantly (last year, the ratio running at 2.2 to 1). 

Consider the effect of unprecedented low natural gas prices, adjusted for inflation.  These extremely low natural gas prices have pushed down the costs of generating electricity, via several mechanisms.  First, more of our electric generation is being done through natural gas combustion, taking advantage of gas prices.  Second, these low prices are exerting price pressure on the competing fuels and generation technologies.  Third, these low prices are driving down the clearing prices of regional clearing markets.

As a consequence, electric rates for all customers classes, residential, commercial and industrial, have been flat or falling in real inflation-adjusted terms.  This has been a boon to families and the economy.  Grid investment has been maintained even as costs passed on to consumers from fuel companies and power plant owners have stagnated.  

Starting with the February issue, Public Utilities Fortnightly will exclusively present such insightful measures of the electric and gas utilities industry, in our new Mega-Metrics centerfold.

Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
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