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Short-Term Energy Outlook

Release Date: March 10, 2015  |  Next Release Date: April 7, 2015  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

Much of the eastern United States experienced a very cold February, which resulted in increased electricity demand for space heating. EIA estimates total U.S. generation during February 2015 averaged 11,800 gigawatthours (GWh) per day, which would be a monthly record for February. However, this estimated level of generation still falls short of the winter-month record for total U.S. power generation (12,178 GWh per day) during January 2014.

Electricity Consumption

Milder January temperatures offset the cold February weather, leading to a forecast reduction of 6.2% in first-quarter heating degree days compared with the same period last year. The colder-than-expected temperatures in February contribute to an increase in EIA's projection of residential electricity sales for 2015, compared with last month's forecast. EIA expects U.S. retail residential sales of electricity will grow by 0.7% in 2015 and then decline by 0.3% in 2016. Projected U.S. sales of electricity to the commercial sector increase by 1.6% this year and by 1.1% in 2016. Projected industrial electricity sales rise by 1.9% in 2015 and by 1.3% in 2016.

Electricity Generation

EIA forecasts that U.S. electricity generation will grow by an average of 1.3% in 2015 and 0.6% in 2016. The cost of natural gas used for power generation fell in recent months, with the Henry Hub spot price declining from an average of $4.29/MMBtu last summer to an average of $2.87/MMBtu in February. This decline in fuel costs, combined with upcoming coal plant retirements, is expected to contribute to an increase in natural gas-fired generation. EIA expects the share of total generation fueled by natural gas to average 29.2% during 2015, up from 27.4% last year. In contrast, the share of generation provided by coal falls from 38.7% in 2014 to 37.2% in 2015.

Electricity Retail Prices

Average U.S. residential electricity prices increased in 2014 at the highest rate (3.1%) since 2008. EIA expects continued growth in average residential electricity prices over the forecast period, albeit at a slower pace than last year. The U.S. retail residential price is projected to increase by 1.0% in 2015 and by 1.8% in 2016.

U.S. Electricity Summary
  2013 2014 2015 2016
Retail Prices (cents per kilowatthour)
Residential Sector 12.12 12.50 12.63 12.86
Commercial Sector 10.28 10.75 10.62 10.76
Industrial Sector 6.84 7.01 6.82 6.91
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.35 2.36 2.31 2.34
Natural Gas 4.33 4.98 3.98 4.28
Residual Fuel Oil 19.33 19.26 11.67 12.68
Distillate Fuel Oil 23.08 22.33 15.74 18.57
Generation (billion kWh per day)
Coal 4.332 4.344 4.221 4.181
Natural Gas 3.082 3.074 3.311 3.371
Nuclear 2.162 2.184 2.135 2.143
Conventional Hydroelectric 0.736 0.709 0.752 0.723
Renewable (non-hydroelectric) 0.695 0.770 0.808 0.874
Total Generation 11.140 11.214 11.359 11.422
Retail Sales (billion kWh per day)
Residential Sector 3.82 3.84 3.87 3.86
Commercial Sector 3.68 3.72 3.78 3.82
Industrial Sector 2.68 2.62 2.67 2.70
Total Retail Sales 10.21 10.20 10.34 10.40
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income -0.2 2.4 3.2 2.4
Manufacturing Production Index 2.9 3.8 3.0 3.5
Cooling Degree Days -12.6 -0.4 4.7 0.6
Heating Degree Days 18.5 1.9 -3.7 -3.8
Number of Households 0.7 0.5 0.9 1.3

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