Retail Energy Buyer has new benchmark retail electricity price data from the Energy Research Council (ERC) that will be provided each week in the right sidebar of the newsletter. The benchmark metrics in these tables are based on a standardized database of daily matrix prices from over a dozen retail electricity suppliers. Benchmarks are derived from suppliers’ daily prices, aggregated across the General Service (GS) rate classes for each utility, and then used for the weekly averages. Benchmarks profile the average prices for GS rate classes by utility and how they are trending over time. ERC has updated its price database daily since September 2013. These same benchmark metrics profile average pricing across contract terms and contract start dates extending out over the next 12 months.
Recent Price Movements
Over the past month, Rhode Island has seen the retail electricity sector’s largest price increases (4.27 percent) followed by Massachusetts (2.66 percent). Interestingly, there was a 2.58 percent decrease in Connecticut, which borders the former two states. Texas saw the largest monthly decrease at 2.96 percent.
Pricing by Contract Term
It is common for customers to pay a slight premium for the certainty of locking in long-term pricing, as PAPowerSwitch explains. In the ERC table of prices by contract term, longer-term contracts have slightly higher pricing on average than shorter-term contracts, with 5-year contracts being the most expensive, followed by 4-year contracts. Of note, 5-year contracts in Massachusetts and Connecticut are priced about 20 percent higher than 1-year contracts. The fact that customers are willing to pay such a premium for longer-term contracts indicates concern over the long-term direction of markets in those states.