The Changing Structure of the Electric Power Industry 2000: An ... - EIA

Figure 24. Average Revenue per Kilowatthour for All Sectors by State, 1998
CA
HI
11.56
9.03
WA
4.03
OR
4.90
NV
5.76
U.S. Total Average Revenue per kWh in 1998 was 6.74 Cents
ID
4.02
UT
5.16
AZ
7.33
MT
4.80
AK
9.97
WY
4.31
CO
5.95
NM
6.78
ND
5.70
SD
6.26
NE
5.30
KS
6.28
MN
5.71 WI
5.44
IA
6.04
MO
6.08
11.93
9.83
MA
9.59
10.30
IN OH
10.17
6.88
5.34 6.38 WV
VA
5.07
5.88
6.99
4.16
KY
OK
5.43
TX
AR
5.78
LA
5.62
MS 6.40
5.98
5.56
6.45
5.53
6.07 5.78
FL
7.01
AL
IL
7.46
NH ME
VT
9.75
NY
10.71
MI
RI
9.58
7.09
CT
PA
7.86
NJ
DE
MD
DC
NC 7.41
TN
GA
SC
Cents per kWh
0-4.99
5.00-5.99
6.00-6.99
Over 7.00
kWh = Kilowatthour.
Note: The average revenue per kilowatthour of electricity sold is calculated by dividing revenue by sales. Sales in deregulated
retail electricity markets are not included.
Source: Energy Information Administration, Form EIA-861, “Annual Electric Utility Report.”
cents per kilowatthour were the six New England States,
New York, New Jersey, Alaska, and Hawaii. Since the
1996 edition of this report, the average revenue from
electricity sales to all consumers in the United States has
declined from 6.9 cents per kilowatthour to 6.7 cents per
kilowatthour. 54 It is not coincidental that many of the
States leading the restructuring movement are among
the States with high prices. They see restructuring as a
means of lowering prices. In contrast, States with
average prices below 6 cents per kilowatthour are still
scattered throughout the country. Most have average
prices for all consumers that are less than one-half those
in States with the highest average revenue. These States
have less incentive than the higher-cost States to
restructure their electricity markets. A similar geographic
pattern exists for average electricity prices
received from industrial consumers, although industrial
consumers yield one-third lower average revenues than
all retail customers (Figure 25). 55
Large industrial electricity consumers typically pay less
because it is less costly to service one large customer
than many small ones. With this power, industrial
consumers have played a substantial role in motivating
the restructuring of the electric power industry. Their
bargaining power is reflected in the declining trend of
industrial prices relative to those paid for all consumers
(Figure 26). The relative price industrial consumers paid
for electricity rose from the mid-1960s until 1983, then
declined from 1983 through 1997, then rose slightly in
1998, but not to the level it had been in 1996. Because
real average revenues from both groups have been
falling since 1983, the relatively lower revenues for
industrial consumers indicate that their average price
has been falling faster than the average price charged to
all consumers.
Over the years, utilities have developed programs to
help lower the price of electricity to the industrial sector.
54 Both numbers are in nominal units.
55 Because industrial consumers usually use larger amounts of electricity than other consumers, and because they usually take it at
higher voltages, the cost of providing each unit of electricity to them is lower.
Energy Information Administration/ The Changing Structure of the Electric Power Industry 2000: An Update 43