Electricity

Electricity Consumption

EIA projects that the average residential customer will consume 3% more electricity between December 2016 and March 2017 compared with the same period last winter. However, this forecast is highly dependent on winter temperatures. Total U.S. consumption of electricity in 2016 was 1.2% lower than in 2015. For all of 2016, EIA estimates residential electricity sales were unchanged from 2015. Forecast residential sales remain flat in 2017 and increase by 0.9% in 2018. Sales of electricity to the commercial sector were relatively unchanged in 2016 and are expected to remain flat in 2017, followed by growth of 0.7% in 2018. Industrial electricity sales declined by 4.3% in 2016 and are expected to rise by 3.0% in 2017 and by 0.5% in 2018.

Electricity Generation

In 2016, annual U.S. electricity generation from natural gas surpassed generation from coal-fired power plants, the first time this has happened based on data going back to 1949. Natural gas supplied an estimated 34% of total U.S. electricity generation in 2016 compared with 30% for coal. Natural gas prices have increased in recent months, with the Henry Hub price rising from an average of $1.73/MMBtu in March 2016 to $3.59/MMBtu in December 2016. These higher prices have begun to encourage more electricity generation from coal-fired power plants, a trend that should continue during 2017. The natural gas share of electricity generation in 2017 is forecast to fall to 32.3%, and the coal share of generation is expected to rise to 32.5%.

EIA forecasts that the share of generation provided by natural gas will rise slightly to 32.8% in 2018, even as natural gas prices are expected to increase slightly between 2017 and 2018. The share of coal generation is expected to average 31.6% in 2018. The share of generation from nuclear falls to 18.8% in 2018, from 19.7% in 2016. Generation from hydropower remains relatively steady, averaging 6.4% of total generation over the next two years. The share of generation from nonhydropower renewables rises from 8.3% in 2016 to 9.1% in 2018 as new wind and solar capacity comes online.

Electricity Retail Prices

The U.S. residential electricity price averaged 12.5 cents per kilowatthour (kWh) in October 2016. This price is 2.1% lower than the U.S. residential price in October 2015. EIA expects the annual average U.S. residential electricity price to increase by 2.6% in 2017 and by 2.5% in 2018.