RisingElectricityCosts-EEI.pdfVIP

rising Electricity Costs: A Challenge For Consumers, Regulators, And Utilities Electricity is the lifeblood of the U.S. economy. It powers our homes, offices, and industries; provides communications, entertainment, and medical services; powers computers, technology, and the Internet; and runs various forms of transportation. Not only is electricity the most flexible and most controllable form of energy, its versatility is unparalleled. Clearly, electricity is a crucial commodity we all take for granted. We scarcely think about it, unless we don’t have it. Fortunately, almost without exception, electricity is there for us when we flip the switch—Americans enjoy the benefits of the world’s most reliable electric system. What’s more, continuing advances in more efficient electric technologies make elec- tricity cleaner and more valuable. And still, it remains one of the true “bargains” among crucial U.S. commodities. Today, electricity costs are generally inexpensive, comprising a modest part of most customers’ monthly expenses. Within the next few years, regulators and utilities in several states will be revisiting electricity rates that have been frozen for years. The new rate proceedings are need- ed to fund new infrastructure investments and to ensure electric rates cover today’s higher fuel and operating costs. Devising ratemaking strategies that address the new realities of today’s energy markets will be a challenge. But, they are a necessary step if the electric utility industry is to make the long-term investments needed to help ensure reliable, affordable, and increasingly clean electricity. Edison electric institute Electricity: A Great Value Today’s high-technology society demands electricity to Figure 1: U.S. Economic Growth Is Linked to power nearly all new products that come to market. Elec- tricity and the many technologies that it powers enhance