Electricity prices in North Dakota lower than neighboring states

(12/13/07)

North Dakotans paid less for electricity in 2006 than people living in neighboring states, according to statistics released last month by the U.S. Energy Information Administration (EIA). North Dakotans paid an average retail price of 6.21 cents per kilowatt-hour.

Of its neighbors, Minnesota paid the highest average retail price of 6.98 cents with Montana next at 6.91 cents and South Dakota with 6.70 cents per kilowatt-hour. The electricity in the Upper Midwest, however, is substantially lower than prices found on the East and West Coasts. Massachusetts paid over 15 cents and California paid over 12 cents per kilowatt-hour.

“Energy prices have been a pocketbook issue for many Americans this winter because of the volatility of gasoline and propane prices,” said Steve Van Dyke, communications director for the Lignite Energy Council. “However, electricity from North Dakota lignite remains a bargain for North Dakotans and electric customers in neighboring states.”

Van Dyke noted that over 90 percent of the electricity used in the state comes from lignite-based plants, and production costs at North Dakota’s power plants have remained stable since 1990.

Overall, the average cost per megawatt-hour for electricity in 2006 from the seven lignite-based plants in North Dakota was $17.40, according to EIA and Global Energy Decisions, Inc.  In 1990, the average cost of a megawatt-hour (MWH) from lignite-based plants in the region was $15.59. A megawatt-hour of electricity is enough to supply power to roughly 800 homes for one hour.

The production costs do not include transmission and distribution expenses that are added into a customer’s final bill, but do include the price of fuel. Over the past 16 years, the price for a ton of lignite has remained relatively steady – about $10 to $12 per ton depending upon individual fuel contracts.

“With an 800-plus year supply of economically recoverable reserves, lignite-based power plants will continue delivering reliable power for decades to come,” Van Dyke said.

The $17.40 per MWH from the lignite-based plants in 2006 compares favorably to the U.S. average of $23.68 per MWH for all coal-based power plants and $67.20 per MWH for electricity generated from natural gas.

North Dakota’s lignite-based plants are Antelope Valley Station, Coal Creek Station, Coyote Station, R.M. Heskett Station, Leland Olds Station and the Milton R. Young Station.