The U.S. electric industry is undergoing an unprecedented transformation, in terms of magnitude and speed, from a dominance of coal to more natural gas, wind and solar.
Natural gas fired combined cycle generation has among the lowest levelized cost of electricity (LCOE). Between 2006 and 2014 natural gas prices fell by 34 %. Meanwhile the average retail electricity price rose by 17%, which is about the same rate as consumer price index during this period. Only one state, Texas, saw a significant decrease, 13 %, in retail electricity prices.
It triggers the question: Do lower energy costs also mean lower electricity prices for the consumers? The question is straightforward. The answer is more complicated. It is “Yes and No”. Let’s elaborate by looking at available data for the last 10 years.
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