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Short-Term Energy Outlook

Release Date: February 9, 2016  |  Next Release Date: March 8, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

The severe winter storm that struck the East Coast in late January likely had a limited effect on electricity demand, as increased residential use was offset by lower commercial use because many businesses closed during the storm. However, some customers experienced power outages, with customers in North Carolina and New Jersey among the most affected.

Electricity Consumption

Many households, especially in the southern states, use electricity for space heating. Despite last month's snowstorm, average heating degree days during the first quarter of 2016 are expected to be 12% lower than in the same period last year, contributing to first-quarter electricity sales to the residential sector that are 6% lower. For the entire year, EIA forecasts residential electricity sales will fall by 0.3% in 2016 and then increase by 2.4% in 2017. Forecast U.S. retail electricity sales to the commercial sector rise by 0.9% in 2016 and by 1.2% in 2017. Forecast U.S. industrial sector sales increase by 0.9% in 2016 and by 1.0% in 2017.

Electricity Generation

Total U.S. electricity generation in 2016 is expected to average 11.2 terawatthours per day, 0.3% higher than in 2015. Forecast generation grows by an additional 1.6% in 2017. Natural gas prices are forecast to stay relatively low through most of the forecast period, with the average Henry Hub price remaining below $3.50/MMBtu until December 2017. EIA expects that the share of total generation fueled by natural gas in 2016 will average 32.3%, while coal supplies 33.3% of generation, which is similar to their shares in 2015. The projected generation share for natural gas falls to 31.5% in 2017, and coal's share remains unchanged, as generation from renewable energy sources increases.

Electricity Retail Prices

The U.S. retail price of electricity to the residential sector is projected to average 12.2 cents per kilowatthour (kWh) in the first quarter of 2016 and 12.7 cents/kWh for the whole year, similar to 2015 levels. In 2016, the average residential electricity price is expected to be highest in New England at 18.4 cents/kWh. It is expected to be lowest in the West South Central region at 10.9 cents/kWh. In 2017, the U.S. residential electricity price is projected to average 13.1 cents/kWh.

U.S. Electricity Summary
  2014 2015 2016 2017
Retail Prices (cents per kilowatthour)
Residential Sector 12.52 12.66 12.68 13.10
Commercial Sector 10.74 10.60 10.74 10.95
Industrial Sector 7.10 6.90 6.95 7.07
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.36 2.23 2.18 2.20
Natural Gas 4.98 3.26 3.54 4.05
Residual Fuel Oil 19.19 10.42 7.72 9.27
Distillate Fuel Oil 22.32 14.48 11.52 14.34
Generation (billion kWh per day)
Coal 4.333 3.750 3.749 3.801
Natural Gas 3.087 3.649 3.629 3.595
Nuclear 2.184 2.187 2.136 2.156
Conventional Hydroelectric 0.705 0.672 0.702 0.749
Renewable (non-hydroelectric) 0.765 0.811 0.901 0.989
Total Generation 11.215 11.211 11.250 11.425
Retail Sales (billion kWh per day)
Residential Sector 3.86 3.84 3.83 3.92
Commercial Sector 3.70 3.72 3.76 3.80
Industrial Sector 2.73 2.63 2.65 2.68
Total Retail Sales 10.31 10.21 10.26 10.42
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 2.7 3.6 3.1 3.3
Manufacturing Production Index 2.8 2.2 1.1 3.5
Cooling Degree Days -0.7 14.8 -5.9 1.8
Heating Degree Days 1.9 -10.2 0.3 2.9
Number of Households 1.0 1.0 1.0 1.0

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