Electricity

U.S. Electricity Consumption

During this past winter, U.S. heating degree days during the fourth quarter of 2011 and the first quarter of 2012 totaled 18 percent below the 30-year normal. Temperatures this winter are expected to be colder than last winter. In particular, projected heating degree days in the southern states, where a majority of homes heat with electricity, are 27 percent higher than last winter. As a result of the colder weather, EIA projects retail sales of electricity to the residential sector this winter will average 6.2 percent more than retail sales last winter.

U.S. Electricity Generation

Natural gas prices have risen steadily since this past spring. In September, the Henry Hub price averaged $2.85 per million Btu, which was 46 percent higher than the average in April. With higher natural gas prices EIA expects natural gas to lose some of its recent gains in electricity generation market share. The share of total generation fueled by natural gas in the fourth quarter of 2012 is projected to average 27.8 percent compared with 25.4 percent during the same period last year. By the beginning of 2013, higher natural gas prices should contribute to year-over-year declines in natural gas's share of total generation. EIA expects natural gas to fuel 25.8 percent of generation during the first quarter of 2013, which is 2.8 percentage points lower than during the first quarter of 2012.

U.S. Electricity Retail Prices

EIA expects the nominal U.S. residential electricity price will rise by 0.4 percent during 2012 to an average of 11.84 cents per kilowatthour. During 2013, U.S. residential retail electricity prices increase 1.3 percent over the average 2012 price. When measured in real terms, the U.S. residential electricity price declines by 1.7 percent in 2012 and by 0.3 percent in 2013.