Executive Summary

Generation: Data from the National Oceanic and Atmospheric Administration (NOAA) show that September 2008 was 1.7 percent “below average consumption.” September 2007, in contrast, was the eighth warmest on record. Additionally, the Commerce Department reported that real gross domestic product decreased from the second quarter to the third quarter of 2008, and the manufacturing component of the Federal Reserve’s Industrial Production Index was down 4.8 percent compared to the September 2007 value. The relatively normal 2008 weather compared to the hot September 2007 and the decline in economic activity contributed to a September 2008 net generation level that was 5.2 percent lower than the previous year.

Most (55.7 percent) of the 12-month decline in September levels is attributable to the fall in natural gas-fired generation. Gas-fired generation totals in two States – Texas and Mississippi – accounted for over half of this decline. Coal-fired generation in September 2008 was 4.5 percent lower than it was in September 2007. Drops in coal-fired generation in Ohio and West Virginia accounted for 37.3 percent of this decline. Net generation from conventional hydroelectric sources, however, was 12.7 percent higher than it had been in September 2007. This increase is primarily attributable to rises in Washington and New York, although Missouri’s contribution was significant as easing drought conditions contributed to State-level generation that was 465.5 percent higher than it was in September 2007. Petroleum liquid-fired generation was 17.9 percent lower compared to a year ago, with its overall share of net generation continuing to shrink. As wind-powered generation has decreased in recent months, the September 2008 generation was total was 9.5 percent lower than it was in September 2007. The September-to-September decline in Texas accounted for 74.0 percent of the national fall for wind power.

Figure 1: Net Generation by Major Energy Source: Total (All Sectors), October 2007 through September 2008

Year-to-date, net generation was down 0.8 percent from 2007 levels. Net generation attributable to coal-fired plants was down 0.5 percent. Nuclear generation was down 0.2 percent. Generation from petroleum liquids was down 41.4 percent, while natural gas-fired generation was down 2.0 percent. The September increase in conventional hydroelectric generation contributed to a year-to-date total that was up 5.2 percent.

Even with the decline in September wind generation, year-to-date wind generation was up 38.7 percent due primarily to increased generation in Texas and Colorado. Together, these States accounted for 54.8 percent of the year-to-date national rise in wind generation.

Coal-fired plants contributed 48.3 percent of the Nation’s electric power, year-to-date. Nuclear plants contributed 19.3 percent, while 21.5 percent was generated at natural gas-fired plants. Of the 1.1 percent generated by petroleum-fired plants, petroleum liquids represented 0.8 percent, with the remainder from petroleum coke. Conventional hydroelectric power provided 6.7 percent of the total, while other renewables (primarily biomass, but also geothermal, solar, and wind) and other miscellaneous energy sources generated the remaining electric power (Figure 2).

Figure 2: Net Generation Shares by Energy Source: Total (All Sectors), Year-to-Date through September, 2008

Consumption of Fuels: Consumption of coal for power generation in September 2008 was down by 3.0 percent compared to September 2007, a decrease that was in line with the fall in generation. For the same time period, consumption of petroleum liquids and petroleum coke decreased by 20.7 percent and 17.6 percent, respectively, while the consumption of natural gas decreased by 15.5 percent.

Year-to-date, consumption of coal increased by less than one-tenth of one percent. Natural gas consumption decreased by 6.8 percent, while the consumption of petroleum liquids and petroleum coke fell by 42.1 percent and 16.3 percent, respectively.

Fuel Stocks, Electric Power Sector, September 2008

Total electric power sector coal stocks increased between September 2007 and September 2008 by 1.1 million tons. Stocks of bituminous coal (including coal synfuel) decreased by 19.2 percent, or 13.0 million tons between September 2007 and September 2008 (from 68.0 to 54.9 million tons). Subbituminous coal stocks grew by a similar margin, 14.7 million tons, between September 2007 and September 2008 (from 71.2 to 85.8 million tons).

Electric power sector liquid petroleum stocks totaled 39.7 million barrels at the end of September 2008, a decrease of 8.7 percent (3.8 million barrels) from September 2007. September 2008 stocks were 1.3 percent (0.5 million barrels) lower than at the end of August 2008.

Fuel Receipts and Costs, All Sectors, September 2008

In September 2008, the price of coal to electricity generators maintained the August level, thereby breaking the recent upward trend. The downward trend in the prices of petroleum liquids and natural gas continued in September. Receipts of coal, petroleum liquids, and natural gas declined from their August 2008 level and from their September 2007 level.

The average price paid for petroleum liquids decreased from $19.63 per MMBtu in August 2008 to $16.98 in September. This was a 13.5-percent decrease and a 77.8-percent increase from September 2007. Receipts of petroleum liquids in September 2008 were 4.3 million barrels, a 4.8-percent decrease from August 2008 and a 34.5-percent decrease from September 2007. This decrease is understandable when taking the aforementioned 77.8-percent price increase into consideration.

The average price paid for natural gas by electricity generators in September was $7.87 per MMBtu, a 13.6-percent decrease from the August 2008 level of $9.11. The September price was 28.2 percent higher than the September 2007 price of $6.14 per MMBtu. Receipts of natural gas were 672.4 million Mcf, down 19.6 percent from August 2008 and down 5.8 percent from September 2007.

The average price paid for coal in September 2008 was $2.18 per MMBtu, which was the same price paid in August. It was 22.5 percent higher when compared with the September 2007 price of $1.78 per MMBtu. Receipts of coal were 89.1 million tons, down 5.2 percent when compared with August 2008 data and down 1.1 percent from September 2007. The overall price for fossil fuels was $3.91 per MMBtu in September 2008, a 13.3-percent decrease from August 2008, and 24.9 percent higher than in September 2007.

Year-to-date (January through September) 2008 prices compared to the same period last year were up 39.6 percent for natural gas, 90.7 percent for petroleum liquids, and 15.3 percent for coal. Year-to-date 2008 receipts compared to the same period last year were up 4.2 percent for natural gas. Year-to-date receipts for petroleum liquids and coal were down 27.9 percent and 2.1 percent, respectively.

Figure 3: Electric Power Industry Fuel Costs, October 2007 through September 2008

Sales, Revenue, and Average Retail Price, September 2008

The average retail price of electricity for September 2008 was 10.31 cents per kilowatthour (kWh), 3.0 percent lower than August 2008 when the average retail price of electricity was 10.63 cents per kWh, and 9.2 percent higher than September 2007 when the price was 9.44 cents per kWh. The typical decrease in electricity demand due to more moderate temperatures at summer’s end led to lower prices than in August 2008. Retail sales between September 2007 and September 2008 decreased 3.2 percent due to the slowing economy and comparably less cooling demand than September 2007. The average price of residential electricity for September 2008 decreased 0.16 cents to 11.94 cents per kWh, down from 12.10 cents per kWh in August 2008 when cooling demand was higher. At 11.94 cents per kWh, the average residential price of electricity increased by 9.1 percent from September 2007. These increases in the retail electricity prices are influenced by the increases in fossil fuel prices for the same period.

Sales: For September 2008, sales in the residential and industrial sectors decreased by 8.6 and 0.9 percent, respectively, while sales in the commercial sector increased by 0.9 percent as compared to September 2007. For the month, total retail sales were 325.4 billion kWh, a decrease of 29.4 billion kWh from August 2008, and a decrease of 10.8 billion kWh from September 2007, a 3.2 percent decrease. Year-to-date 2008, sales were 2,872.0 billion kWh, corresponding to a 0.7 percent increase over the same period in 2007.

Revenue: Total retail revenues in September 2008 were $33.6 billion, reflecting an increase in revenue of 5.7 percent from September 2007 and yet a $4.2 billion decrease from August 2008 reflecting continued higher prices of fossil fuels and slowing demand, respectively. Simply stated, the revenue increase year over year was related to higher fuel costs while seasonality influenced demand from month to month, August to September. For September 2008, residential sector retail revenues decreased 0.2 percent from September 2007, while the commercial and industrial sector retail revenues increased by 10.0 and 11.4 percent respectively reflecting the changes in weather which affect the residential consumer while yet higher fossil fuel prices affect commercial and industrial users more than weather. Year-to-date 2008, retail revenue increased to $281.2 billion, a 7.5-percent increase over the same period in 2007.

Average Retail Price: For the month, average residential retail prices slipped slightly to 11.94 cents per kWh from 12.1 cents per kWh in August 2008 although 9.1 percent higher than September 2007 when the price was 10.94 cents per kWh. The September 2008 average commercial retail price was 10.77 cents per kWh, a 9.0 percent increase from September 2007. The average industrial retail price for September 2008 rose to 7.36 cents per kWh, a 12.4-percent increase over the September 2007 value. Year-to-date September 2008 residential prices have increased by 6.0 percent when compared to the same period last year and the year-to-date average retail prices for all sectors increased to 9.79 cents per kWh, or 6.6 percent over the same period. (Figure 4).

Figure 4: Average Retail Price of Electricity to Ultimate Customers by End-Use Sector, Year-to-Date through September 2008 and 2007

Contacts:

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