Source: U.S. Energy Information Administration, Short-Term Energy Outlook, April 2019, and the National Oceanic and Atmospheric Administration
EIA’s Short-Term Energy Outlook forecasts that the typical U.S. residential household will consume about 3,080 kilowatthours of electricity this summer (June through August), down 5% from the average summer consumption in 2018. If this forecast is realized, it would be the lowest level of electricity consumption per customer since 2014 and the second-lowest level since 2001. EIA expects summer electricity consumption will be lower than in 2017 because of milder projected temperatures.
Expectations for milder summer weather are based on projections from the National Oceanic and Atmospheric Administration (NOAA)’s Climate Prediction Center. NOAA is projecting that cooling degree days—an indicator of energy use for air conditioning—during the months of June through August 2019 will total about 9% lower than summer 2018 and about 3% lower than the average of the previous 10 summers.
In most parts of the country, residential electricity demand peaks during the summer months, when households are using air conditioning. According to EIA’s Residential Energy Consumption Survey, 87% of homes in the United States use air conditioning. Air conditioning accounts for 17% of annual residential electricity expenditures and is a large factor in fluctuations in residential electricity use.
Overall residential consumption per household has generally been trending downward since 2010 in response to greater energy efficiency. In particular, federal efficiency standards that came into effect in the early 1990s require minimum performance levels for space heating, cooling, and other energy-consuming appliances and devices. Electricity use has declined in recent years as households have replaced this equipment over the past two decades.
EIA expects that the typical U.S. residential customer’s electricity bills will total $412 between June and August this year, 3% less than the average expenditure during summer 2018. The amount of money that a customer spends on electricity through the summer is based on the quantity of electricity used, measured in kilowatthours (kWh), and the price charged for that electricity (cents per kWh).
Source: U.S. Energy Information Administration, Short-Term Energy Outlook, April 2019
EIA projects that average summer residential electricity bills will be 3% lower than last year because of an expected 5% decline in average electricity consumption per customer that more than offsets an expected 2% increase in average U.S. retail electricity prices. EIA expects that retail electricity prices will be higher this year in response to a 5% increase in the power sector’s price for natural gas during 2018. Electricity prices have also been rising as electric utilities pass on the costs of increased investments in transmission infrastructure and new generating capacity.
Principal contributor: Tyler Hodge
