The falling cost of coal and other fuels means that Progress Energy customers in North Carolina will see a rate discount of about 4 percent starting in December.
The monthly bill of a typical residential customer will drop from about $106 to about $102, or nearly $50 over 12 months. This estimate applies to a household that uses 1,000 kilowatt hours of electricity a month.
The change was approved late yesterday by the N.C. Utilities Commission.
The rate drop is offset somewhat by the Raleigh power company's increasing cost to provide energy efficiency programs to its customers. Progress is offering financial incentives to customers who buy energy efficient appliances and for installing rooftop solar panels.
Without the efficiency program costs, dropping fuel costs would have resulted in a rate decrease of nearly 6 percent.
The rate drop reverses an energy pricing trend that pushed costs upward throughout much of the 1990s and 2000s. Fuel costs are dropping worldwide in response to slack demand in the wake of a global recession that has slowed economic activity. The drop in fuel prices is seen as temporary during a worldwide economic lull.
Last December, Progress dropped its rates by 29 cents a month for a typical residential customer -- to reflect fuel costs, energy efficiency costs and the cost of renewable energy resources.
Fuel costs drove up electricity costs to $106.78 a month for Progress Energy customers in 2008 for typical houshold usage.
The monthly cost was down as low as $81.52 in 2000 for 1,000 kilowatt hours a month.
In the past 20 years, Progress electricity prices stayed flat three years, dropped six times and went up in 11 years.