Why hedge your electricity rates for 1, 3, or five years? 

1.  Companies use the strategy to lock in rate and have a set cost.
       Southwest: Fuel Hedging = Low Fares& Profitability ? 
       Southwest had secured significant hedges as far out as 2009, securing 25% of its fuel at $35 a barrel
       Two articles who a company is successfully using an energy hedge strategy

2. Costs of electricity, historically keep going up.  Everywhere.

    We can see from the below chart that the the average cost of electricity keep going up. 
    Under electricity deregulation, Texans have paid some of the highest rates in the nation - a reversal of at least a decade of relatively cheap
    electricity under the state's old regulated system.
    New Jersey expect double digit increases

3.  Power Plant cost keep rising, and can barely keep up with consumption.

     Consumption continues to increase, the grid is underpowered, power plant fuel sources (coal, oil, gas) cost keep rising,
      and making plants emission friendly will cost billions.

      Read article on reliability of the grid
      Coal prices have risen by as much as 93%, and we can expect this cheap electricity source to accelerate rate increases in 2009, 2010, 2011.