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U.S. electric rates predicted to rise

July 25, 2008 at 12:53 PM   |   Comments

WASHINGTON, July 25 (UPI) -- U.S. utility companies are responding to rising fuel costs with increasing requests to raise rates, the Energy Information Administration said.

"In the last two months, 20 to 30 utilities started requesting to have their rates increased," EIA electricity analyst Tyler Hodge told The Christian Science Monitor. "With the rise in fuel costs, other utilities will follow suit pretty soon," Hodge said.

The EIA predicts electric rate hikes around the country will rise 5.2 percent in 2008 and 9.8 percent in 2009, the newspaper reported.

Price increases in crude oil, coal and copper are prompting utilities to seek higher rates, the report said.

Natural gas prices are also pushing electric rates. At $6 per million British thermal units a year ago, the price peaked at $13.31 in early July, prompting Southern California Edison to warn consumers of a rate hike. "The price has doubled over the last twelve months, and we are quite vulnerable," said utility spokesman Gil Alexander.

The rate hike for the company's 4.8 million customers could rise by an average of 25 percent this year, the newspaper reported.

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