Recession Pulls Plug on Electricity Prices

By Rob Quinn,  Newser Staff
Posted Aug 12, 2009 3:21 AM CDT
There only have been five years since 1950, including 2008, in which electricity demand fell in the US.   (AP Photo/Damian Dovarganes)
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(Newser) – Electricity prices across America have nosedived amid an almost unprecedented fall in demand, the Wall Street Journal reports. Market prices are down up to 40% from the historic highs of last year, and are on course to keep plummeting. The lower prices aren't always seen by consumers immediately because of long-term contracts, but most can expect reductions to eventually filter through.

This year is expected to witness the sharpest falloff in electricity demand in over 50 years as businesses contract and stretched households aim to cut down power usage. The lower electricity prices are one of the few bright spots in the recession for many businesses, although some analysts warn that with power plants now having no financial incentive to build new resources, there could be a shortage of supply—and consequently much higher prices—when the economy bounces back.