Released: November 05, 2008

Electricity bills fall as cheaper natural gas lowers rates

Source: Paul Davidson, USA Today

Here’s a bright spot in an ailing economy: Electricity prices are falling in many areas.

The sharp drop in natural gas prices and, to a lesser extent, oil prices is slashing electric rates across big swaths of the USA. Utilities in the Northeast, Texas, Florida, the Mid-Atlantic and California rely heavily on natural-gas-fired power plants to generate electricity.

“In those regions, rates will come down with the price of gas,” says Bernstein Research analyst Hugh Wynne.

Natural gas prices have plummeted as the anemic economy has dampened consumption. Also, natural gas resources jumped this year as producers found ways to unearth fresh supplies embedded in shale rock. 

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