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Electricity Price Trends <br /> A frequent question asked by the media and other observers <br /> of electricity deregulation is how changes in retail and <br /> wholesale power markets have affected the price of electricity. <br /> This is a brief report on what, if anything, actual data can tell us <br /> about the subject. It is not an analysis or comprehensive treatment <br /> of deregulation and its effects, nor does it address other market <br /> dimensions, such as number of customer switches or number of <br /> players in the market. It simply looks at the available information <br /> on retail prices. <br /> The report shows a relatively steady decline, on average, in the <br /> inflation-adjusted price of end-use electricity. The trend began long <br /> before the introduction of significant market competition, and can <br /> largely be explained by traditional and expected factors, deregulation <br /> not among them. <br /> I <br /> Long-Term Trends in <br /> Revenue per Kilowatt-Hour <br /> The Energy Information Administration (EL-k) collects annual <br /> data on revenue and sales of electricity. From this information it is <br /> possible to calculate the average revenue per kilowatt-hour sold to <br /> consumers. This measure, which can be calculated for the nation as <br /> a whole, a region, state, or individual utility, shows the average rate <br /> level, rather than any actual rate charged by a utility. <br /> FIGURE I shows that rate levels for all customers, as well as for <br /> residential customers, have increased gradually over the last 20 years. <br /> The average annual increase in residential rates between 1982 and <br /> 2002 has been about one percent per year, while rates for all types <br /> of customers combined have increased more slowly on average, at <br /> 0.8 percent per year. <br /> .' <br />