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Short-Term Energy and Summer Fuels Outlook

Release Date: April 8, 2014  |  Next Release Date: May 6, 2014  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

Periods of extreme cold in the Midwest and Northeast this past winter caused spikes in wholesale electricity prices at certain times of peak demand. In early January, the low temperatures and constraints on natural gas delivery led to average day-ahead prices close to $250/megawatthour in the New England and New York wholesale power markets. These high prices encouraged generation from power plants that have the capability to burn petroleum, leading to the highest level of generation from petroleum liquids in the Northeast since January 2006. However, these spikes in petroleum-fired generation were only temporary, and the fuel accounts for a very small share of total generation.

U.S. Electricity Consumption

The cold winter weather was a primary driver of the estimated 4.3% year-over-year increase in total U.S. retail sales of electricity during the first quarter of 2014. Year-over-year growth was especially strong in the residential sector, which grew by an estimated 7.3%. For the upcoming summer months, EIA projects residential sales during the second and third quarters will average 0.6% more than last summer. This growth is driven by a 5.8% increase in summer cooling degree days, offset slightly by efficiency improvements in air conditioning, lighting, and other electricity uses.

U.S. Electricity Generation

Preliminary EIA data indicate that 4.7 gigawatts (GW) of coal capacity was retired during 2013 (following 10.3 GW of coal capacity retirements during 2012). Despite these retirements, coal generators have increased their utilization of existing capacity in recent months so that the share of total generation fueled by coal during the first quarter of 2014 rose to 41.4% from 40.0% during the first quarter of 2013. This increase in utilization of coal-fired capacity was driven primarily by rising natural gas fuel costs, which in turn drove down the share of generation fueled by natural gas to 23.8% during the first quarter of 2014 from 25.6% during the same period last year. EIA projects total U.S. electricity generation will average 11.3 terawatthours per day in 2014, an increase of 1.8% from last year. Coal fuels 40.3% of total generation during 2014 while natural gas supplies 26.5%.

U.S. Electricity Retail Prices

EIA expects the U.S. residential price of electricity to average 12.4 cents per kilowatthour during 2014, an increase of 2.6% from 2013. Price increases are highest in the New England (7.1%) and Middle Atlantic (4.0%) regions.

U.S. Electricity Summary
  2012 2013 2014 2015
Retail Prices (cents per kilowatthour)
Residential Sector 11.88 12.12 12.43 12.68
Commercial Sector 10.09 10.29 10.65 10.85
Industrial Sector 6.67 6.82 7.02 7.08
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.38 2.35 2.35 2.36
Natural Gas 3.42 4.32 5.20 4.83
Residual Fuel Oil 21.05 19.33 19.17 18.46
Distillate Fuel Oil 23.51 23.08 22.58 22.21
Generation (billion kWh per day)
Coal 4.137 4.345 4.559 4.437
Natural Gas 3.349 3.051 3.002 3.110
Nuclear 2.102 2.162 2.103 2.120
Conventional Hydroelectric 0.755 0.737 0.764 0.757
Renewable (non-hydroelectric) 0.597 0.694 0.743 0.793
Total Generation 11.059 11.118 11.313 11.342
Retail Sales (billion kWh per day)
Residential Sector 3.76 3.81 3.88 3.85
Commercial Sector 3.63 3.67 3.74 3.76
Industrial Sector 2.69 2.62 2.65 2.68
Total Retail Sales 10.09 10.11 10.29 10.32
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 2.0 0.7 2.2 3.6
Manufacturing Production Index 4.2 2.5 2.6 4.4
Cooling Degree Days 1.7 -12.7 5.3 0.4
Heating Degree Days -12.6 18.5 0.6 -7.5
Number of Households 1.1 1.2 1.3 1.4

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