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Short-Term Energy Outlook

Release Date: July 7, 2015  |  Next Release Date: August 11, 2015  |  Full Report    |   Text Only   |   All Tables   |   All Figures


The North American Electric Reliability Corporation(NERC) indicates that there are adequate resources available this summer to meet projected peak electricity demand levels. Even in areas of the United States that have experienced constraints in certain power generation supplies, reliability of the bulk power system should not be a concern this summer. California's drought has significantly lowered available hydroelectric resources within the state, but the California Independent System Operatorhas determined that recent additions of renewable generation capacity and increased imports of electricity from the Pacific Northwest should be enough to cover peak power demand this year, even under an extreme scenario of high electricity consumption and possible generator outages.

Electricity Consumption

EIA forecasts that the typical U.S. residential electricity customer will use an average of 1,044 kilowatthours per month this summer (June, July, and August). This level of consumption would be 3.7% higher than the same period last year. The increase is driven primarily by an expected 13% increase in summer cooling degree days. For the year, EIA expects U.S. retail sales of electricity to the residential sector during 2015 to grow by 0.3% from 2014 levels. Residential sales of electricity are expected to fall by 1.0% in 2016 in response to projected milder summer and winter temperatures next year that reduce cooling and heating-related consumption.

Electricity Generation

U.S. generation of electricity fueled by natural gas exceeded coal-fired generation for the first time on record in April 2015, primarily because of sustained low natural gas prices. Normal seasonal fluctuations in the fuel mix and projected increases in the cost of natural gas for power generation should result in coal-fired generation exceeding natural gas generation for the rest of 2015. EIA forecasts coal's share of U.S. total generation will average 35.6% in 2015, down from 38.7% in 2014. In contrast, the natural gas fuel share averages 30.9% this year, up from 27.4% in 2014.

Electricity Retail Prices

The U.S. retail price of electricity to the residential sector is projected to average 12.8 cents per kilowatthour in 2015, which is 2.5% higher than the average price last year. This year-over-year increase in average electricity prices, combined with higher expected summer residential use, leads to a forecast 5.9% ($23) increase in the typical residential customer's summer electricity expenditures compared with last summer.

U.S. Electricity Summary
  2013 2014 2015 2016
Retail Prices (cents per kilowatthour)
Residential Sector 12.22 12.50 12.81 13.12
Commercial Sector 10.32 10.75 10.92 11.17
Industrial Sector 6.84 7.01 7.04 7.14
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.34 2.36 2.29 2.30
Natural Gas 4.33 4.98 3.84 4.12
Residual Fuel Oil 19.32 19.18 11.38 12.66
Distillate Fuel Oil 23.05 22.34 16.09 17.97
Generation (billion kWh per day)
Coal 4.332 4.344 4.016 4.056
Natural Gas 3.082 3.074 3.484 3.400
Nuclear 2.162 2.184 2.144 2.121
Conventional Hydroelectric 0.736 0.709 0.696 0.732
Renewable (non-hydroelectric) 0.695 0.770 0.809 0.897
Total Generation 11.140 11.214 11.290 11.338
Retail Sales (billion kWh per day)
Residential Sector 3.82 3.84 3.86 3.82
Commercial Sector 3.68 3.72 3.78 3.82
Industrial Sector 2.68 2.62 2.62 2.66
Total Retail Sales 10.21 10.20 10.28 10.32
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income -0.2 2.5 3.5 2.5
Manufacturing Production Index 2.9 3.8 2.2 4.0
Cooling Degree Days -12.6 -0.5 10.4 -4.7
Heating Degree Days 18.5 1.9 -3.3 -4.1
Number of Households 0.7 0.8 0.7 0.8

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