Washington's Energy Indicators

20.  Energy Price Trends — Average Energy Prices by Fuel

EVEN THOUGH ELECTRICITY PRICES IN WASHINGTON TEND TO BE LOWER THAN IN OTHER PARTS OF THE COUNTRY, ELECTRICITY IS STILL THE MOST EXPENSIVE ENERGY SOURCE. REAL FOSSIL FUEL PRICES HAVE DECLINED SIGNIFICANTLY SINCE THE EARLY 1980'S, BUT AVERAGE ELECTRICITY PRICES HAVE REMAINED CONSTANT.

While the effect of the oil shocks of 1973 and 1978 on Washington energy prices was dramatic, it was relatively short-lived. Petroleum prices increased by 50 percent in 1974, increased by another 63 percent between 1978 and 1981, and then quickly settled back to pre-1973 levels. Real natural gas prices have followed a similar trend, rising steeply during the 1970s, falling during the 1980s, and staying relatively stable in the 1990s. The average price of electricity, which had been low and stable for years, increased by 95 percent between 1979 and 1984 as the costs of new, large power plants, some of which were never completed, were incorporated into electric utility rates. In contrast to oil prices, real electricity prices have not declined from the level they reached during the early 1980s.

The price increases for all fuels caused real Washington energy expenditures to climb by 56 percent between 1978 and 1982. Expenditures were 25 percent lower by 1986 as the price of fossil fuels plummeted, but have since climbed back near the levels of the early 1980s, as energy consumption has increased.

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