September 4, 2003

Missouri Electric Rates Among Lowest in Nation

Missouri has an abundant supply of electricity and is among the states with the lowest electricity prices in the nation, according to the Missouri Department of Economic Development. An abundant, low cost supply of energy is good news for Missouri residential, commercial and industrial consumers at a time when electricity shortages and outages have recently plagued the nation, from California to the eastern seaboard.

According to the U.S. Department of Energy's Energy Information Administration, Missouri's combined cost for electricity per kilowatt-hour across all sectors in 2002 was 5.5 cents, ranking the state 10th lowest in the nation for electricity prices for all sectors -- residential, commercial and industrial. The U.S. average rate per kilowatt-hour was 6.97 cents.

Of Missouri's surrounding states, electricity prices for all sectors in Nebraska (5.19 cents), Kentucky (4.02 cents) and Oklahoma (4.94 cents) were lower than in Missouri while prices in Arkansas (5.64 cents), Illinois (6.92 cents), Iowa (5.71 cents), Kansas (5.98 cents) and Tennessee (5.68 cents) outpaced Missouri.

Missouri ranked seventh, tied with Tennessee, for the lowest price for residential electricity. Missouri households paid 6.4 cents per kilowatt-hour, compared to an average of 8.2 cents across the nation.

Missouri's commercial electricity was priced at 5.3 cents per kilowatt-hour in 2002, the fourth lowest price in the nation. The U.S. average was more than two cents higher at 7.6 cents per kilowatt-hour. Industrial customers in Missouri paid 4.0 cents per kilowatt-hour for electricity in 2002, and that rate ranked 14th lowest in the nation. In the industrial category the U.S. average price was 4.8 cents.

"The cost and availability of energy resources are certainly important factors that businesses consider when making site selection decisions," said Joseph L. Driskill, DED director. "The fact that Missouri offers a reliable, low-cost energy supply aids in our ability to capture good economic development opportunities. And it is another strong indicator that Missouri does have a business-friendly climate."

Missouri Public Service Commission Chairman Kelvin Simmons, stated that "Missouri's electricity prices have been low for many years and the PSC will continue to focus on not only reasonable rates but on an adequate supply of electricity as well as a safe and reliable transmission system. This is a critical asset to all the people and businesses that call Missouri their home.

"Missouri's electricity generation and transmission system has a good, solid history of remaining operational. It is designed to account for numerous failures yet remain operational," added Simmons. "Because of its central location, Missouri is surrounded by electric transmission interconnections in all directions, rather than being limited like states on either coast. This makes it less likely, but not impossible, that a massive power outage may occur here."

Missouri's transmission system is monitored, maintained and upgraded on a regular basis. Continuous efforts are being made by electric utility companies to ensure Missouri has an adequate amount of electricity for its customers now and in the future.

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