Pennsylvania was one of the first States to restructure its retail electric power markets. Under their restructuring plan, which started January 1999, customers of Pennsylvania's 8 largest investor-owned utilities were allowed to shop for alternative sources of power. The plan provided for price caps for retail customers, plus the residential and commercial customers received an additional 8 percent rate reduction. These changes have affected the trend in Pennsylvania's retail electricity rates.

• Through the 1990s, Pennsylvania's nominal retail electricity prices—prices unadjusted for the effects of inflation—have been relatively stable at approximately 8.0 cents per kilowatthour (kWh). Lower coal prices used in coal-fired power plants and improved operating efficiencies in nuclear plants, which together accounted for almost 90 percent of Pennsylvania's power generation, have contributed to Pennsylvania's price stability over the 1990s (see graph).
  
  
• Because nominal electricity prices have been stable, real electricity prices—prices from which the effects of inflation are eliminated—in Pennsylvania have been decreasing throughout the 1990s, reaching a low of 7.67 cents per kWh in 1999 (see graph).
  
  
• In 1999, industrial customers in Pennsylvania paid an average 5.22 cents per kWh while residential customers paid 9.19 cents per kWh in 1999 (see map). Compared to many other States, and compared to national averages, these prices were relatively high. In 1999, national average retail electricity prices were 4.43 cents per kWh for industrial customers and 8.16 cents per kWh for residential customers.
  
  
• Three factors will help lower Pennsylvania's retail electricity rates over the next few years or more. First, electricity prices were capped at 1997 levels for utilities for nine years. Distribution rates, the charges to deliver electricity over the lines, were capped for 4.5 years. Second, Pennsylvania's utilities agreed to rate reductions (the level of reduction varies between utilities). Third, low coal-fired and nuclear power costs will help to keep retail prices down.
  

Related Websites

• Energy Information Administration, Monthly Energy Review (Table 7.5):
  http://www.eia.doe.gov/mer/elect.html
• Average Retail Prices of Electricity, 1960 - 2003 (Table 8.10)
• Energy Information Administration, State Electricity Profiles: http://www.eia.doe.gov/cneaf/electricity/st_profiles/pennsylvania.pdf
• Energy Information Administration, Electric Power Monthly (Tables 44-55): http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html
• Energy Information Administration, U.S. Average Monthly Bills by Sector, Census Division, and State (Table 1): http://www.eia.doe.gov/cneaf/electricity/esr/esr_tabs.html
• Energy Information Administration, Electricity Revenue, Sales and Price for Power Marketers (Tables C1-C4): http://www.eia.doe.gov/cneaf/electricity/esr/esr_tabs.html
• Energy Information Administration, Electricity Revenue, Sales, and Price by State and Utility: http://www.eia.doe.gov/cneaf/electricity/esr/esr_tabs.html