January CPI: How Far Have Electric Prices Fallen Regionally?

Deck: 

In last year, electric prices fell 6.2% in the northeast (9.9% in Boston area, 11% in NY area) and 3.5% in the south (9.5% in Houston area, 8.7% in Dallas area)

Today in Fortnightly

On Friday, the Consumer Price Index for January was announced. Yesterday's column analyzed this ultimate measure of consumer prices, for all goods and services, and then electric and natural gas service specifically. Pretty interesting. 

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But the numbers were averaged for the country as a whole. Today's column will look at the indices for regions and metro areas. 

Electric service prices fell sharply in the northeast, by over six percent The numbers are even better for the Boston and New York metropolitan areas. The price of Boston's electricity fell around ten percent. In the New York area (including counties in four states), the price of electricity fell a remarkable eleven percent. Can't get much better than that.

Electric service prices fell in the south too, by three and a half percent The numbers are great for the Houston and Dallas metropolitan areas. The price of Houston's electricity fell nine and a half percent. In the Dallas area, the price of electricity fell around eight and a half percent.

Natural gas is the hero. The shale gas revolution has driven down the cost of gas and with it the cost of producing power. The regions most benefitting are those where gas plays an outsized role in determining power production cost.

The Midwest is another story, with more coal in the power production mix. Electric service prices in this region rose slightly, by a half percent. Still, the region's overall CPI rose more, by eight tenths percent.

Don't feel so badly for our friends in the country's middle. The electricity price index for the Midwest still lags that of the nation overall. 

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Since the CPI's base period, 1982 - 1984, the Midwest's electricity prices have risen ninety-seven percent of the electricity price trend nationwide. And, eighty-nine percent of the trend for all goods and services that Midwest consumers purchase.

 

Tomorrow, we'll preview the March issue of Public Utilities Fortnightly. Hard to imagine that we fit into one issue of PUF: Arctic Monkeys, Princess Kaiulani, financial transmission rights, the Bunsen burner, Reddy Kilowatt, time-varying rates, a puzzle called FERC Fun, the Martin Act, market-based rate authority, and a column called “Musk and Me.”

Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
E-mail me: mitnick@fortnightly.com