I'm no engineer, but if people are using less electricity doesn't the producers costs go down?
Maybe there is an electrical engineer out there that can explain it to me.
Power plants and transmission lines are a “fixed” cost - the cost of building and operating them does not change whether you use them at 90% of capacity or 70% of capacity. The cost of debt to finance construction doesn’t change with utilization, and the depreciation schedule for taxation doesn’t change with utilization.
When you’re operating at only 70% (eg) of capacity, you have more money tied up in your plant and infrastructure than you need, so your fixed costs per kWh generated are going up.
The variable costs (things like fuel, cooling water pumping costs, etc) and perhaps transmission scheduling costs go down as you operate at lower capacities.
Net:net, due to the fixed costs, your cost per kWh does go up as production goes down, unless the drop in fuel prices is so radical that it completely absorbs the fixed costs.