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Short-Term Energy Outlook

Release Date: December 9, 2014  |  Next Release Date: January 13, 2015  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

The electricity industry has closed a number of coal-fired power plants over the past two years. During 2013, an estimated 5,700 megawatts (MW) of coal capacity was retired in the United States. From January through September of 2014, the industry shut down an additional 2,265 MW of coal capacity, with another 895 MW of retirements planned through the end of the year. These retirements account for 2.9% of existing coal-fired capacity at the end of 2012. Coal-fired power plant retirements pick up significantly next year, when more than 12,800 MW of capacity is expected to be shut down.

Electricity Consumption

Temperatures throughout the United States were significantly below normal last month, with the exception of the Pacific Coast. U.S. HDD in November were 18% higher than the previous 10-year average. However, HDD for the remainder of the winter are expected to be about 1% lower than the 10-year average and 10% lower than the same period last winter. EIA forecasts that U.S. residential electricity sales during the 2014-15 winter (October-March) will average about 1.8% less than the previous winter. EIA forecasts that sales of electricity to the commercial sector this winter will grow by 0.8%, while industrial electricity sales will grow by 1.2% from last winter.

Electricity Generation

EIA estimates that U.S. electricity generation in 2014 will average 11.2 terawatthours per day, which would be 1.1% higher than average generation last year. Rising natural gas prices this year have encouraged the industry to use existing coal capacity at higher utilization rates than last year, leading to an expected increase in coal's share of total generation from 39.1% in 2013 to 39.4% in 2014, while the share supplied by natural gas falls from 27.4% to 27.1%. In 2015, EIA expects that natural gas's fuel share will rise to 27.6% and coal's fuel share will decline to 38.9% in response to lower natural gas prices and retirements of coal-fired power plants.

Electricity Retail Prices

EIA expects the U.S. residential price to average 12.5 cents per kilowatthour in 2014, which is 3.0% higher than the average last year. Prices increase in all regions of the country except along the Pacific Coast. Average U.S. residential electricity prices grow at a slower rate of 1.7% in 2015.

U.S. Electricity Summary
  2012 2013 2014 2015
Retail Prices (cents per kilowatthour)
Residential Sector 11.88 12.12 12.47 12.69
Commercial Sector 10.09 10.29 10.71 10.88
Industrial Sector 6.67 6.82 7.05 7.01
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.38 2.35 2.36 2.36
Natural Gas 3.42 4.32 5.12 4.58
Residual Fuel Oil 21.05 19.33 19.49 12.98
Distillate Fuel Oil 23.51 23.08 22.21 17.67
Generation (billion kWh per day)
Coal 4.137 4.345 4.426 4.410
Natural Gas 3.349 3.051 3.050 3.126
Nuclear 2.102 2.162 2.168 2.120
Conventional Hydroelectric 0.755 0.737 0.705 0.735
Renewable (non-hydroelectric) 0.597 0.694 0.753 0.815
Total Generation 11.059 11.118 11.237 11.334
Retail Sales (billion kWh per day)
Residential Sector 3.76 3.81 3.88 3.88
Commercial Sector 3.63 3.67 3.72 3.76
Industrial Sector 2.69 2.62 2.63 2.66
Total Retail Sales 10.09 10.11 10.25 10.32
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 3.0 -0.2 2.7 2.4
Manufacturing Production Index 4.4 2.9 3.6 2.5
Cooling Degree Days 1.7 -12.7 -0.6 5.5
Heating Degree Days -12.5 18.5 3.8 -8.2
Number of Households 1.1 0.7 0.5 0.7

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