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Short-Term Energy and Summer Fuels Outlook

Release Date: April 12, 2016  |  Next Release Date: May 10, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

Last year, natural gas combined-cycle plants had a higher average capacity factor than coal power plants for the first time on record. The capacity factor is a measure of how intensively a generating unit or a fleet of generators is run.

Electricity Consumption

Overall U.S. temperatures during summer 2016 are forecast to be lower than in summer 2015, although still slightly above the 10-year average. U.S. cooling degree days in 2016 are expected to be 5% lower than last year and 2% higher than the previous 10-year average. However, there is regional variation across the country. Forecast cooling degree days in the South Atlantic states in 2016 are 10% lower than in 2015, which contributes to an expected decline of 5% in the summer electricity bill for the average residential consumer in that area. In contrast, cooling degree days in the East North Central states are expected to be 12% higher than last year, and EIA expects the average residential bill to be 8% higher than in summer 2015.

Electricity Generation

Although the Mercury and Air Toxics Standards (MATS) went into effect in April 2015, some coal power plant operators applied for one-year or (in a limited number of cases) two-year extensions. As the extensions expire, plants will need to either install pollution controls, switch fuel sources, or suspend operations to comply with MATS. These operator decisions, along with the continued low price of natural gas, contribute to EIA's forecast of a 7.1% decline in coal generation in 2016 compared with last year. Some of the decline is offset by a projected 3.4% increase in natural gas generation this year. Overall, total U.S. electricity generation in 2016 is expected to average 11.1 terawatthours per day, 0.5% lower than in 2015. Forecast total U.S. generation increases by 1.6% in 2017.

Electricity Retail Prices

EIA forecasts the U.S. average retail price of electricity to the residential sector in April will be 12.6 cents per kilowatthour (kWh). The U.S. residential electricity price averaged 12.7 cents/kWh in 2015 and is expected to average 12.6 cents/kWh and 12.9 cents/kWh in 2016 and 2017, respectively.

U.S. Electricity Summary
  2014 2015 2016 2017
Retail Prices (cents per kilowatthour)
Residential Sector 12.52 12.67 12.61 12.91
Commercial Sector 10.74 10.59 10.50 10.72
Industrial Sector 7.10 6.90 6.80 6.91
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.36 2.23 2.16 2.19
Natural Gas 4.98 3.22 3.03 3.87
Residual Fuel Oil 19.19 10.36 7.46 7.92
Distillate Fuel Oil 22.32 14.43 11.07 12.86
Generation (billion kWh per day)
Coal 4.333 3.715 3.450 3.557
Natural Gas 3.087 3.658 3.781 3.727
Nuclear 2.184 2.184 2.142 2.178
Conventional Hydroelectric 0.705 0.688 0.746 0.745
Renewable (non-hydroelectric) 0.765 0.817 0.899 0.986
Total Generation 11.215 11.198 11.147 11.329
Retail Sales (billion kWh per day)
Residential Sector 3.86 3.84 3.79 3.88
Commercial Sector 3.70 3.72 3.74 3.79
Industrial Sector 2.73 2.63 2.62 2.65
Total Retail Sales 10.31 10.20 10.17 10.34
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 2.7 3.5 3.0 3.4
Manufacturing Production Index 2.8 2.2 0.3 2.9
Cooling Degree Days -0.7 14.6 -5.0 1.0
Heating Degree Days 1.9 -10.2 -3.1 6.7
Number of Households 1.0 1.0 1.0 1.0

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