U.S. Energy Information Administration logo

Today in Energy

May 12, 2014

Many industrial electricity customers are farmers

graph of number of industrial electric customers, top-10 states, as explained in the article text
Source: U.S. Energy Information Administration, Electric Power Annual

Republished May 12, 4:00 p.m. to clarify maps and content.

Farmers make up a significant share of industrial electricity customers in certain states. This is because of demand from farm irrigation systems, which are categorized by electric utilities as industrial load. For example, Nebraska is largely rural and agricultural, but it has the third-highest count of industrial electricity customers in the United States. The same factor drives up the number of industrial electricity customers in Idaho and Kansas, which are also among the top 10 states in number of industrial electricity customers. States with a large agriculture industry also tend to have among the lowest industrial sales of electricity per industrial customer.

Irrigation load from farm irrigation systems can be costly to serve, because of the high cost of connecting these dispersed systems to the electric grid and the high cost of having enough capacity available to meet seasonal irrigation load. Dawson Public Power District, a rural electric cooperative in an agriculture-heavy region of Nebraska, accounted for less than 3% of statewide industrial electricity sales in 2012 but had one of the highest average prices for industrial power. In general, the highest industrial electricity prices in Nebraska tend to be located in the rural southern and western portions of the state.

The two largest utilities (Omaha Public Power District and Nebraska Public Power District) that distribute electricity for about 40% of all the megawatthours sold to industrial customers in the state in 2012.

map of U.S. industrial electric customer counts, as described in the article text

Source: U.S. Energy Information Administration, Electric Power Annual

A number of industrial electricity customers are concentrated in the Great Plains states and other agricultural-heavy states like Idaho and California.

map of U.S. industrial electric sales, as described in the article text

Source: U.S. Energy Information Administration, Electric Power Annual

The sales of electricity to industrial customers are clustered in the industrial Midwest (Illinois, Indiana, Ohio, Michigan, and Pennsylvania), along with large states with diverse economies like California and Texas.

map of U.S. industrial electric sales per customer, as described in the article text

Source: U.S. Energy Information Administration, Electric Power Annual

Nebraska, Idaho, and Kansas had the lowest sales of electricity per industrial customer in 2012.

Many agricultural-heavy electric utilities use demand-response programs to manage the costs of connecting a large number of small users to the grid. Nebraska's Dawson Public Power offers lower rates for agricultural customers who allow the utility to control the electric usage of these systems when demand for electricity is high, a form of demand response. This allows the grid operator to adjust the load shape in a given day and reduce the need to bring on more expensive sources of electricity generation.

Principal contributors: M. Tyson Brown, Marc Harnish