Drennen Quoted on Energy Choices – Hobart and William Smith Colleges \
The HWS Update

Drennen Quoted on Energy Choices

New York State Gas and Electric and Rochester Gas and Electric are allowing their customers to choose their electricity supplier and pricing, according to the article “Energizing decision: Local residents asked to make electricity choice” in the Nov. 16 Finger Lakes Times. A second story, “Eco-Energy options available,” followed the first.

Tom Drennen, associate professor of economics, explained that “for a long time, large companies like NYSEG and RG&E monopolized the energy scene. With only one supplier, customers had to receive their electricity from the power plant in their designated area. Deregulation really started in 1992 at the wholesale level because large companies wanted choice.”

Customers can choose between fixed and variable rates.

“[Variable pricing] is somewhat of a gamble,” said Drennen. “I would expect it to be highest on hot summer days when everyone's using air conditioning. You have a lot of inefficient air conditioners that you run in the summer. We should see prices continue to creep down in terms of per-kilowatt-hour cost, which is what we pay for. That's been the trend for years.”

Drennen also believes that deregulatory efforts will increase competition and drive prices down.

“Prices are not going to fall overnight,” he said, “but if people really do start picking other suppliers, prices really will go down.”