Re: SC67

http://online.wsj.com/article/SB121011408227772081.html?mod=googlenews_wsj

Expect a Jolt
When Opening
The Electric Bill

Rates Jump in Many States
As Utilities Pass On Surges
In Costs of Coal, Natural Gas

Surging fuel costs are about to inflict more pain on consumers, this time in the form of rapidly rising electricity bills.

Power prices are being pushed up across the U.S., with increases sometimes soaring into double digits, due to costlier coal and natural gas, the fuels used to make 70% of the nation's electricity.

It usually takes awhile for fuel-price swings to show up in electricity bills because utilities typically buy most of what they need under long-term arrangements. As older contracts expire, though, utilities are facing the reality of higher costs.

Proposed electricity-rate increases are cropping up all over the country. Potomac Edison Co., a unit of Allegheny Energy Inc., is asking Virginia regulators for permission to raise rates in July by 29%. In its rate request, the utility cited higher fuel and purchased-power costs.

In Oregon, Portland General Electric Co. is seeking a 9% rate increase effective in January 2009, about a third of which is attributable to higher fuel costs. "There's huge push-back against this rate increase," said Bob Jenks, executive director of the Citizens' Utility Board of Oregon, a group that represents consumers. The increase would come on top of a 10% overall increase since January 2007, and he said customers fear rate "pancaking" in which small increases add up to big jumps.

Company spokesman Steve Corson said Portland General pursues "many, many small measures" to control expenses but can't do much about fuel increases.

More than 90% of coal burned in the U.S. goes for electricity production, and fuel is the industry's largest single expense. Appalachian coal, which on Tuesday closed at $99.50 a ton, costs more than twice as much as it did in the first months of 2007 when it fetched about $45 a ton. Natural gas, closing at $11.15 on Tuesday, costs 45% more than it did early in 2007.

Rising global demand for coal and supply disruptions in Indonesia and Australia are also contributing to price pressures...........

...........BEHIND THE RISES

What's pushing up electricity rates:
• Soaring costs of coal and natural gas.
• Increase in equipment purchases by utilities.
• Deregulated markets that allow greater profits.
• Regulations that allow utilities to pass through costs quickly.