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Short-Term Energy Outlook

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

Electricity

At the end of 2014, the nuclear generating unit at the Vermont Yankee power plant shut down for decommissioning after more than 40 years of operation. Five other nuclear units have been retired in the past two years. There are 99 remaining nuclear units in the United States, including 23 in the Northeast Census region, where Vermont Yankee operated.

Electricity Consumption

Despite the January snowstorms in the Midwest and Northeast, average U.S. heating degree days (HDD) for the month were 10% lower than in January 2014. Based on weather forecasts from the National Oceanic and Atmospheric Administration, EIA expects HDD during the first quarter of 2015 to be 13% lower than last year. Cooling degree days during the summer months (April-September) are expected to be 6% higher than last summer. Lower consumption of electricity for space heating coupled with efficiency improvements are projected to offset increased air-conditioning use during the summer, leading to a projected 0.4% year-over-year decline in residential electricity sales during 2015. Residential electricity sales are projected to grow by 0.9% in 2016. Projected sales of electricity to the commercial sector increase by 1.3% in 2015 and by 0.5% in 2016. Projected industrial electricity sales rise by an average of 1.8% annually in both 2015 and 2016.

Electricity Generation

EIA forecasts that U.S. electricity generation will grow by an average of 1.0% 2015 and 0.9% 2016. The cost of natural gas used for power generation has fallen in recent months, with the Henry Hub spot price declining from an average of $4.29/MMBtu last summer to an average of $2.99/MMBtu in January. This decline in fuel costs, combined with upcoming coal plant retirements, is likely to increase the use of natural gas-fired generating capacity. EIA expects the share of total generation fueled by natural gas to average 28.4% during 2015, up from 27.2% last year. In contrast, the share of generation provided by coal falls from 38.9% to 37.8%. The retirement of the Vermont Yankee plant contributes to a decline in the Northeast region’s nuclear power fuel share from 35.5% in 2014 to 33.3% this year.

Electricity Retail Prices

EIA expects continued growth in average residential electricity prices over the forecast period, albeit at a slower pace than in 2014. The U.S. retail residential price is projected to increase by 1.1% in 2015 and by 1.8% in 2016. Electricity prices in most areas of the country are projected to increase in 2015. Projected price increases in 2015 are highest in the Midwest states (2.6%).

U.S. Electricity Summary
  2013 2014 2015 2016
Retail Prices (cents per kilowatthour)
Residential Sector 12.12 12.49 12.63 12.85
Commercial Sector 10.29 10.74 10.73 10.92
Industrial Sector 6.82 7.03 6.86 6.96
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.35 2.35 2.33 2.34
Natural Gas 4.32 5.00 3.91 4.27
Residual Fuel Oil 19.33 19.38 11.24 12.44
Distillate Fuel Oil 23.08 22.28 15.70 18.91
Generation (billion kWh per day)
Coal 4.345 4.355 4.271 4.222
Natural Gas 3.051 3.051 3.217 3.298
Nuclear 2.162 2.184 2.129 2.143
Conventional Hydroelectric 0.737 0.711 0.751 0.725
Renewable (non-hydroelectric) 0.694 0.770 0.815 0.899
Total Generation 11.118 11.202 11.312 11.417
Retail Sales (billion kWh per day)
Residential Sector 3.81 3.86 3.84 3.87
Commercial Sector 3.67 3.72 3.76 3.78
Industrial Sector 2.62 2.63 2.68 2.72
Total Retail Sales 10.11 10.22 10.30 10.40
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income -0.2 2.4 3.3 2.6
Manufacturing Production Index 2.9 3.9 4.4 3.3
Cooling Degree Days -12.6 -0.7 5.1 0.7
Heating Degree Days 18.5 1.9 -7.5 -0.1
Number of Households 0.7 0.5 0.8 1.3

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