Electricity prices: are they fair?

Electricity prices: are they fair? / Amlan Saha, International Energy, IAEE blog,4/01/2012

http://blog.iaee.org/?p=47556

Imagine that you, as a resident of New Jersey, must pay at least $7 for a gallon of gasoline when motorists in Seattle can fill up their tank for just over $3 per gallon. Outrageous? But that is exactly how electricity is priced today. Just, non-discriminatory, and economically sound are three qualities electric utilities often strive to achieve when setting electricity rates. Assuming they are reasonably successful, the rates U.S. residents actually pay for electricity indicate that these qualities can translate into vastly different monthly bills depending on geography – from just over $40 in Maine to nearly $170 in the state of Hawaii. From levies to fund local public policies to weather, a diverse set of factors contributes to the differences. Generation and transmission costs, however, are by far the biggest drivers of price divergence…


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