For businesses and homeowners, cheaper electricity won’t be found in natural gas. While it burns cleaner and eliminates some of the environmental concerns of our dirtiest fuel source, equivalent energy production from natural gas is already nearly double the cost of coal. Coal costs about $2.39 per million BTUs while natural gas is $4.45 per million BTUs.

Wyoming’s Powder River Basin is one of Colorado’s principal suppliers of coal, and supplies about 45 percent of total US coal consumption. Dwindling production along the East coast and increased foreign demand is causing an uptick in the value of Powder River Basin coal. Historically, coal from the Powder River basin was priced around $5/ton. Now that coal from the basin is powering plants along the East coast and as far away as China, Southeast Asia and South America, prices have elevated to over $13 per ton.

As the world’s emerging economies move into the electric age, coal is quickly becoming one of their primary sources of energy. As one of the world’s largest and fastest growing markets, China switched from a coal exporter to a coal importer in 2009. With slightly less than 40 years of coal reserves remaining, it is estimated that China will continue down the path of importing coal to fuel its growing economy. According to the Denver Post, China will quadruple its coal consumption by 2030.

Combined, these factors point toward one ominous reality. Our increasing demand for energy, a switch from coal to natural gas, and rising coal exports are going to increase our electric costs. The only question remaining is what are you and your business going to do about it?

“For years, consumers have advocated ‘the more you use, the more you pay’ for electricity,” PUC Chairman Ron Binz said. “Today, we’re making that slogan a reality.”

A typical residential customer uses about 687 kilowatt-hours (kwh) per month during the four-month summer period and about 605 kwh per month the rest of the year. Under the new tiered rates, residential customers with average usage will pay about 2 percent more in summer and about 5 percent less during the rest of the year. Customers who are able to reduce their electricity usage during the peak months will be able to see larger savings on their bills.
“The largest customers will pay more, and customers will realize greater rewards for their efforts to use electricity wisely,” Binz said.

The changes are part of the PUC’s decision in Xcel Energy’s phase II rate case, which sets the rate design for the company’s various customer classes. The company receives no additional revenue from the changes. The new rates are expected to go into effect on June 1.
Source: Department of Regulatory Agencies