California-based utility Pacific Gas and Electric Company has notified the California Public Utilities Commission that average bundled electric rates will drop by 1.1%, effective January 1, 2008, as a result of an expected revenue decrease of approximately $105 million.
Pacific Gas and Electric Company (PG&E) had earlier expected revenue increases of more than $350 million for 2008, as noted in a filing submitted with the commission in August 2007.
The utility said that the forward market prices for natural gas and electricity have dropped considerably. Natural gas which is the fuel for about a third of the state’s power generation is a significant factor in establishing market prices for electricity.
PG&E said that residential customers can expect a rate decrease of about 0.8%. A residential customer who uses an average of 850kWh per month would pay $149.03 per month. In January, that customer’s average monthly electric bill is expected to decrease by $1.54 to $147.49.
Tom Bottorff, PG&E’s senior vice president for regulatory relations, said: Smart energy purchasing strategies and an improving electric market have allowed us to pass on savings to the 15 million Californians that rely on Pacific Gas and Electric Company for their energy needs.