Nationwide Electricity Expenses to Rise Nearly 5% this Summer
The Energy Information Administration (EIA)’s Short-Term Energy Outlook forecasts that residential electricity expenditures will increase by 4.8 percent this summer, driven by a 2.1 percent weighted price increase and a 2.6 percent increase in demand.
There are significant regional differences, in part resulting from expected weather patterns relative to last summer. In terms of consumption, Pacific states are likely to consume 1.9 percent less electricity than last summer, while the East-North-Central area will consume 6.3 percent more.
Regional Price Differences
EIA predicts electricity prices will rise in all areas of the United States except the Mid-Atlantic and the East-South-Central region. New England customers are expected to see the largest increase in electricity bills because of a 15.4 percent projected increase in summer retail prices. Wholesale prices in the region rose less than expected this past winter, and EIA expects these price savings will be passed on to customers later this year. Customers do not have to wait for utility rates to change, however, if they opt to shop for alternative suppliers who have already adapted their pricing to current market conditions.
Differences among Customer Classes
Commercial and industrial customers are likely to see more favorable changes in prices than residential customers. Commercial prices are expected to rise just 0.4 percent, from 10.75 cents per kWh to 10.79 cents. Industrial prices are projected to fall 1.9 percent from 7.01 cents per kWh to 6.88 cents per kWh.
Although EIA does not explain the phenomenon, it could be in part because larger customers have more options available to continuously improve their control over their electricity expenses—from retail supply and sophisticated pricing plans to demand response, distributed generation, and an evolving set of energy efficiency opportunities.
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