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Short-Term Energy Outlook

Release Date: May 10, 2016  |  Next Release Date: June 7, 2016  |  Full Report    |   Text Only   |   All Tables   |   All Figures

Electricity

Wholesale electricity prices this past winter (October through March) were significantly lower than in the winter of 2014–15. Day-ahead peak power prices averaged $35 per megawatthour (MWh) during winter 2015–16 in the wholesale market for the independent system operator (ISO) of New England, which was 52% below the average peak price during the 2014–15 winter. In the Electricity Reliability Council of Texas (ERCOT) ISO, peak wholesale prices averaged $21/MWh this past winter, a 36% decline from the previous winter. Mild winter temperatures along with low natural gas prices contributed to the lower wholesale electricity prices.

Electricity Consumption

U.S. temperatures during summer 2016, as measured by cooling degree days, are forecast to be close to last summer's level, but 3% higher than the 10-year average. However, regional variations are expected. Forecast cooling degree days in the Pacific states in summer 2016 are 11% lower than in 2015, while cooling degree days in the East North Central states are expected to be 12% higher than in 2015. These regional differences in the level of cooling contribute to flat growth in summer residential electricity sales and 1.5% summer-over-summer growth in commercial electricity sales.

Electricity Generation

Total U.S. electricity generation in 2016 is expected to average 11.2 terawatthours per day, slightly below the amount of electricity generated in 2015. Forecast total U.S. generation increases by 1.6% in 2017. EIA expects 34.0% of total electricity will be generated by natural gas in 2016, up from 32.7% last year. The projected share of coal-fired generation averages 30.5% in 2016, down from 33.2% last year. This would be the first year in which the annual generation share for natural gas exceeds that for coal. Coal is forecast to regain some of its generation share in 2017, as forecast natural gas prices slowly rise, but the forecast share of coal generation (31.4%) in 2017 remains below that of natural gas generation (32.9%).

Figure 25: U.S. Electricity Generation Growth

Electricity Retail Prices

EIA expects the U.S. average retail price of electricity for the residential sector in May will average 12.9 cents per kilowatthour (kWh), with 18.5 cents/kWh in New England as the highest price and 11.1 cents/kWh in the East South Central region as the lowest price. The U.S. residential electricity price averaged 12.7 cents/kWh in 2015 and is expected to fall by 0.7% to 12.6 cents/kWh in 2016 and then rise 2.4% to 12.9 cents/kWh in 2017.

U.S. Electricity Summary
  2014 2015 2016 2017
Retail Prices (cents per kilowatthour)
Residential Sector 12.52 12.67 12.59 12.89
Commercial Sector 10.74 10.59 10.46 10.67
Industrial Sector 7.10 6.90 6.72 6.83
Power Generation Fuel Costs (dollars per million Btu)
Coal 2.36 2.23 2.18 2.21
Natural Gas 4.98 3.22 2.79 3.62
Residual Fuel Oil 19.19 10.36 8.01 9.41
Distillate Fuel Oil 22.32 14.43 11.44 14.19
Generation (billion kWh per day)
Coal 4.333 3.715 3.410 3.564
Natural Gas 3.087 3.658 3.801 3.737
Nuclear 2.184 2.184 2.173 2.179
Conventional Hydroelectric 0.705 0.682 0.748 0.745
Renewable (non-hydroelectric) 0.765 0.817 0.916 0.994
Total Generation 11.215 11.198 11.177 11.355
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 2.63 2.67
Total Retail Sales 10.31 10.20 10.18 10.37
Primary Assumptions (percent change from previous year)
Real DIsposable Personal Income 2.7 3.4 2.7 3.3
Manufacturing Production Index 1.3 1.1 0.1 3.2
Cooling Degree Days -0.7 14.7 -2.9 -1.3
Heating Degree Days 1.9 -10.3 -2.7 6.3
Number of Households 1.0 1.0 1.1 1.1

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