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Electricity Monthly Update

With Data for March 2015  |  Release Date: May 28, 2015  |  Next Release Date: June 24, 2015

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Resource Use: March 2015

Supply and fuel consumption

In this section, we look at the resources used to produce electricity. Generating units are chosen to run primarily on their operating costs, of which fuel costs account for the lion's share. Therefore, we present below, electricity generation output by fuel type and generator type. Since the generator/fuel mix of utilities varies significantly by region, we also present generation output by region.

Generation output by region



map showing electricity regions

Net generation in the United States decreased 2.4% compared to March 2014, as temperatures across the country were well above average for the month, resulting in a decreased demand for heating and thus, lower electricity generation compared to the previous March when temperatures were below average. At the regional level, all parts of the country, except for Florida and Texas, saw decreases in electricity generation compared to last year. Florida was the largest outlier, as the state experienced record warm temperatures in March, which led to an increased demand for residential cooling compared to the previous year.

Electricity generation from coal decreased in all regions of the country compared to the previous year, while electricity generation from natural gas increased in all regions of the country over the same period. After experiencing a large year-over-year increase in conventional hydroelectric generation from February 2014 to February 2015, the West saw a slight decline in conventional hydroelectric generation from March 2014 to March 2015.

Fossil fuel consumption by region





map showing electricity regions

The chart above compares coal consumption in March 2014 and March 2015 by region and shows that coal consumption for electricity generation has decreased in all regions of the country.

The second tab compares natural gas consumption by region and shows that all regions of the country saw an increase in natural gas consumption.

The third tab presents the change in the relative share of fossil fuel consumption by fuel type on a percentage basis, calculated using equivalent energy content (Btu). This highlights changes in the relative market shares of coal, natural gas, and petroleum. In March 2015, the share of natural gas consumption increased in all regions of the country at the expense of coal consumption compared to the previous year.

The fourth tab presents the change in coal and natural gas consumption on an energy content basis by region. The changes in total coal and natural gas consumption were very similar to the changes seen in total coal and natural gas net generation in each region.

Fossil fuel prices




To gain some insight into the changing pattern of consumption of fossil fuels over the past year, we look at relative monthly average fuel prices. A common way to compare fuel prices is on an equivalent $/MMBtu basis as shown in the chart above.

For the fourth consecutive month, the monthly average price of natural gas at Henry Hub decreased from the previous month, going from $2.91/MMBtu in February 2015 to $2.87/MMBtu in March 2015. The natural gas price for New York City (Transco Zone 6 NY) saw a significant decrease in price from the previous month, going from $15.40/MMBtu in February 2015 to $3.73/MMBtu in March 2014. The spike in New York City's natural gas price that occurred in February is often observed during the winter months when there is an increased demand for natural gas used for heating in an area of the country where the natural gas pipeline infrastructure is subject to significant congestion.

After experiencing its first month-to-month price increase in six months during the previous month, the New York Harbor residual oil price decreased from $11.04/MMBtu in February 2015 to $10.16/MMBtu in March 2015. Unlike the previous month, oil used as a fuel for electricity generation was priced out of the New York market (and also the rest of the country) during March 2015.

A fuel price comparison based on equivalent energy content ($/MMBtu) does not reflect differences in energy conversion efficiency (heat rate) among different types of generators. Gas-fired combined-cycle units tend to be more efficient than coal-fired steam units. The second tab shows coal and natural gas prices on an equivalent energy content and efficiency basis. For the third consecutive month, the price of natural gas at Henry Hub was below the price of Central Appalachian coal on a $/MWh basis. This occurred due to the decrease in the Henry Hub price beginning in December 2014. However, the spread between the New York City gas price and the price of Central Appalachian coal decreased considerably due to the significant decrease in New York City's gas price from the previous month.

The conversion shown in this chart is done for illustrative purposes only. The competition between coal and natural gas to produce electricity is more complex. It involves delivered prices and emission costs, the terms of fuel supply contracts, and the workings of fuel markets.

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