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Survey: Average Power Prices Climbed 5.2% in 2004

The average U.S. price paid for electricity by large customers rose by 5.2% between April 2004 and April 2005, with the highest prices in New York, New Jersey and California, according to a national survey by NUS Consulting. The survey, which sampled monthly usage at 24 of the largest investor-owned utility companies in the country, said the average price of power for large customers was 7.95 cents/kWh in April, compared with 7.56 cents/kWh a year earlier.

The survey used an industrial model of monthly usage totaling 450,000 kWh with a monthly demand of 1,000 kW. The survey model also assumes an operating power factor of 85% and customer-owned transformation equipment.

"As world energy prices continue to rise, the U.S. electric industry will reflect this growing trend," said NUS Co-President Richard Soultanian. "This year's increase of 5.2% is one of the highest recorded for the United States and there is little sign that future electricity prices will abate."

Soultanian added that because a lot of electricity in the United States is generated using natural gas, "and this commodity is so closely tied to world oil prices, electric rates are bound to continue to climb ever higher. Additionally, we currently have indications that electricity prices over the next 12 months should increase further, perhaps to historic levels."

According to NUS, the top five utilities in terms of price were Consolidated Edison (NY), 14.84 cents/kWh; Niagara Mohawk (NY), 11.97 cents/kWh; Southern California Edison, 11.45 cents/kWh; Pacific Gas & Electric (CA), 11.31 cents/kWh; and Public Service Electric & Gas (NJ), 9.90 cents/kWh.

The largest price increase in the past year was at Baltimore Gas & Electric in Maryland, which increased its electric pricing by 33.7%. Other utilities with double-digit increases included Con Edison, 15%; Reliant Energy (TX), 13.3%; and TXU (TX), 12%. The lowest priced utilities were Ohio Power, 4.70 cents/kWh; Dominion Power (VA), 5.18 cents/kWh; Duke Power (NC), 5.28 cents/kWh; Alabama Power, 5.37 cents/kWh; and Ameren UE (MO), 5.46 cents/kWh.

According to NUS, the five highest priced utilities are considered deregulated electricity markets. California re-regulated its electricity market in March 2002 retroactive to September 2001. However, customers buying electricity on the open market prior to that time could still purchase competitive supply after March 2002. All four utility companies reporting double-digit increases also opened their electricity markets to retail competition. Except for Ohio, the five lowest cost utilities currently have not deregulated their electricity markets.

Park Ridge, NJ-based NUS provides energy and telecommunication cost audit, analysis and consulting services to industrial and commercial organizations. More information is available at www.nusconsulting.com.

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