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Electricity Monthly Update

With Data for August 2014  |  Release Date: Oct. 24, 2014  |  Next Release Date: Nov. 24, 2014

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End Use: August 2014

Retail rates/prices and consumption

In this section, we look at what electricity costs and how much is purchased. Charges for retail electric service are based primarily on rates approved by state regulators. However, a number of states have allowed retail marketers to compete to serve customers and these competitive retail suppliers offer electricity at a market-based price.

EIA does not directly collect retail electricity rates or prices. However, using data collected on retail sales revenues and volumes, we calculate average retail revenues per kWh as a proxy for retail rates and prices. Retail sales volumes are presented as a proxy for end-use electricity consumption.

Average revenue per kWh by state

August continued the trend of rising revenue per kilowatthour averages, up for the 21st month in a row compared to the same month one year prior. Though regular readers may notice August's 10.92 cents per kilowatthour is actually slightly below July's 11.01 cents per kilowatthour average, year-over-year comparisons are often the best way to make an apples-to-apples comparison. Electricity industry metrics are highly dependent upon weather as well as prices and demand in other energy markets, most notably natural gas, and these can fluctuate greatly from month-to-month and season-to-season. Year-over-year comparisons help eliminate much of this static.

On an individual state level, 40 states had increases compared to last August, with Rhode Island recording the largest increase, up nearly 20%. Alaska and Illinois had the second and third largest year-over-year increases, respectively, with both states up over 12%. Ten states and the District of Columbia had average revenue per kilowatthour decreases relative to last year, with West Virginia down over 5%, and New Jersey and Wisconsin next with declines of just over 2%.

Total average revenues per kilowatthour averaged 10.92 cents in August, 3.1% higher than last year. The residential sector, the largest sector in August by sales volumes, also had the largest average revenue increase, up 4% to 13.01 cents per kWh. The commercial sector increased 3.3% to 11.07 cents per kWh and the industrial sector increased 1.8% to 7.38 cents per kWh. Transportation was the only sector showing a decline this month, down 0.1% to 10.37 cents per kWh.

Total retail sales volumes were down 0.7% from last August. Both the residential and commercial sectors had sales volume decreases compared to last year. These sectors are more weather dependent than the industrial or transportation sectors and the mild August weather dampened electricity demand. States along the heavily populated corridor from North Carolina to Massachusetts experienced weather cooler than last year and much cooler than the typical August, limiting climate control demand. The industrial and transportation sectors were both up slightly this August. They are less affected by weather conditions and much smaller than the residential and commercial sectors.

Retail sales

As is usually the case in August, electric industry retail sales volume trends generally mirrored weather patterns, as demand for climate control appliances rises and falls with temperatures. States that experienced increases in cooling degree days (hotter weather), largely in the Southeast, lower Midcontinent, and along the West Coast, had increases in retail sales volumes. States that experienced decreases in cooling degree days (cooler weather), largely in the Mid-Atlantic, Northeast and Rocky Mountain states, also experienced decreases in retail sales volumes.

The outliers to this correlation between weather and retail sales volumes were North Dakota, West Virginia, Wyoming and Kentucky. North Dakota, West Virginia and Wyoming are all located in areas that experienced cooler weather and were surrounded by states with lower retail sales volumes and yet showed increased retail sales volumes. These three states also happen to be experiencing large increases in oil and gas exploration and production activity, which likely increased electricity demand regardless of slightly cooler summer weather. On the other hand, Kentucky showed a fairly large increase in cooling degree days but had falling retail sales volumes. This occurred because Kentucky's year-over-year comparison continues to be affected by the closure of a large energy consumer last fall, the United States Enrichment Corporation facility in Paducah, Kentucky.

Cooling degree days were up most in the center of the country, Southeast and West Coast compared to last year with Kansas, Missouri and Illinois recording the highest year-over-year increases in August. The largest drops in cooling degree days occurred in the Mid-Atlantic, Northeast and up and down the Rocky Mountains. Virginia, in fact, recorded its tenth coolest August on record, according to the National Climactic Data Center.

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