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Short-Term Energy Outlook

Release Date: August 12, 2014  |  Next Release Date: September 9, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures


During the first quarter of this year natural gas fuel costs increased rapidly, leading the power industry to cut back on the amount of natural gas used for electricity generation, even though the total level of generation was higher than the previous year. The average U.S. share of generation fueled by natural gas fell to 23.5% in the first quarter compared with 25.6% during the same quarter last year. The share of generation from coal picked up much of this decline, rising from 40.0% during the first quarter of 2013 to 42.5% during the first quarter of this year. Natural gas prices have moderated since then, with the natural gas and coal generation shares during the second quarter close to the same levels as last year.

Electricity Consumption

For the entire year, EIA expects that residential sales of electricity in 2014 will average 2.1% more than 2013. A large increase in residential consumption during the first quarter is offset by little growth during the summer and an expected 1.0% decline in residential sales during the fourth quarter of 2014. EIA expects U.S. retail sales of electricity to the industrial sector to remain relatively flat this year. Robust growth of industrial consumption in some areas of the country, especially the West South Central states, is offset by an expected 7.1% decline in industrial sales in the East South Central Census division. Sales of electricity to the commercial sector grow by 1.2% in 2014, led by businesses in the West South Central area.

Electricity Generation

EIA projects that total U.S. electricity generation in 2014 will grow by 1.1% from last year to an average of about 11,200 gigawatthours per day. The share of total generation fueled by natural gas has stabilized in recent months as natural gas prices have moderated from high levels earlier in the year. EIA expects that power sector natural gas prices will hover around $4.60/MMBtu for the next few months. However, these prices are still higher than last year, leading to a slight decline in the natural gas share of generation to 28.0% during the second half of 2014 from 28.7% during the same period last year. The share of generation fueled by coal during the second half rises from 39.2% in 2013 to 40.6% this year in response to declines in natural gas generation and nuclear generation.

Electricity Retail Prices

EIA expects the U.S. residential electricity price to average 12.5 cents per kilowatthour during 2014, an increase of 2.8% from last year. Electricity prices increase in all regions of the country except for the Pacific states, where prices in 2014 are expected to average 2.7% lower than last year. Residential customers in New England experience the highest average price increase (8.5%).

U.S. Electricity Summary
  2012 2013 2014 2015
Retail Prices (cents per kilowatthour)
Residential Sector 11.88 12.12 12.46 12.69
Commercial Sector 10.09 10.29 10.69 10.78
Industrial Sector 6.67 6.82 7.06 7.03
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.38 2.35 2.38 2.39
Natural Gas 3.42 4.32 5.28 4.74
Residual Fuel Oil 21.05 19.33 20.38 18.92
Distillate Fuel Oil 23.51 23.08 22.99 23.23
Generation (billion kWh per day)
Coal 4.137 4.345 4.541 4.398
Natural Gas 3.349 3.051 2.983 3.102
Nuclear 2.102 2.162 2.113 2.120
Conventional Hydroelectric 0.755 0.737 0.716 0.740
Renewable (non-hydroelectric) 0.597 0.694 0.752 0.804
Total Generation 11.059 11.118 11.241 11.284
Retail Sales (billion kWh per day)
Residential Sector 3.76 3.81 3.89 3.86
Commercial Sector 3.63 3.67 3.71 3.74
Industrial Sector 2.69 2.62 2.61 2.65
Total Retail Sales 10.09 10.11 10.23 10.27
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 2.0 0.7 1.9 2.8
Manufacturing Production Index 4.4 2.9 3.6 3.4
Cooling Degree Days 1.7 -12.8 1.9 2.6
Heating Degree Days -12.6 18.5 2.0 -7.2
Number of Households 1.1 1.2 1.2 1.2

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