According to the Wall Street Journal, one of the steadiest trends in business is the growth rate in electricity use. But due to several factors, that rate has fallen sharply during the past year. And the country may in fact see the biggest declines in the rate of electricity use since 1950. The result is the wholesale price of electricity has dropped across much of the country by over 40 percent from last year.

And as NHPR's Mark Bevis reports, that's welcome news for many of New Hampshire's largest electric users.

New Hampshire Ball Bearing employs 630 people at its plant in Peterborough .

Despite the recession, the company boasts continued growth… and slightly increased electricity use.

But managers just negotiated a new contract with an electricity wholesaler.

And this year they say, company is on course to spend about 120 thousand dollars less than last year.

As one manager said, “that’s real money.”

"I’m sure our savings are hundreds of thousands of dollars."

Greg Keenan is a Vice President of Manufacturing at Freudenberg NOK, which has several plants across New Hampshire.

Keenan says Freudenberg’s electric bill used to be as high as 7 million dollars a year.

"Electric rates in NH have historically been very high, so this is really good news for people operating in NH to see a significant cost driver for them especially if you’re manufacturing and using a lot of electricity."

That good news about electric rates is not rare these days.

So says Erin O’Brien with ISO New England, which operates the region’s electric grid.

"New England’s wholesale electricity prices declined more than 54% so far this year compared to the same period in 2008."

And those prices are down 36% from where they were in 2007.

The reasons

"The weather, the economic downturn, and fuel prices."

Though these past few days may make it hard to believe, it has been a relatively cool summer.

So demand has been down for air conditioning.

And the fuel that drives electric power plants up here in New England, oil and natural gas, is cheaper.

"Not too long ago we saw oil prices peaking at $144/barrel range and natural gas prices were in double digits per million BTUs and those prices have retracted dramatically over the last 6 months."

That’s Tom Frantz, the Director of the Electric Division of the Public Utilities Commission.

"Now we see natural gas prices in the $3.50 to $4 /million BTU range and as you know oil prices have dropped to the $60-65/barrel range and they were even in the 40s for a while."

And then there’s the economy.

Public Service of New Hampshire reports that industrial sales of electricity are down about 9%.

Part of that drop is likely due to conservation, part is due to less production.

So there’s less demand for electricity.

While lower energy prices may sound good all around, there may be a downside.

Tom Frantz at the PUC says the low price may make large renewable energy projects less interesting to investors.

"The economics of 90 dollars per megawatt hour in the wholesale market is a whole lot different than50 dollars or 40 dollars a megawatt hour in the wholesale market."

Notice we’ve been saying wholesale market.

Those are the big guys who can go out and make their own contracts with electricity producers.

But if the prices stay down for a while, residential customers may also see some benefit the next time the Unitils and the PSNHs have to go before the PUC to set our rates.

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