LATEST SHORT-TERM FORECASTS FOR NATIONWIDE ELECTRICITY PRICES...

U.S. Electricity Retail Prices.  During 2010, retail prices for electricity distributed to the residential sector averaged 11.58 cents per kWh, about the same level as in 2009.  EIA expects residential prices to rise by 1.0 percent in 2011, followed by an increase of 0.5 percent in 2012 (U.S. Residential Electricity Prices Chart). 

The effect of lower generation fuel costs in 2011 should be more evident in retail prices for electricity distributed to the industrial sector, which EIA projects will fall 1.6 percent during 2011 and then rise 0.2 percent next year. 

 

READ THE COMPLETE ENERGY REPORT HERE.

UPDATE OF NATIONAL FORECASTS FOR NATURAL GAS AND ELECTRICITY PRICES....

U.S. Natural Gas Prices. The Henry Hub spot price averaged $4.49 per MMBtu in January, 2011, $0.24 per MMBtu greater than the average spot price in December 2010.  EIA expects that the Henry Hub spot price will average $4.16 per MMBtu in 2011, a drop of $0.22 per MMBtu from the 2010 average.

U.S. Electricity Retail Prices.  EIA expects the U.S. retail price for electricity distributed to the residential sector to rise slightly (0.6 percent) during 2011, after a small increase of 0.7 percent during 2010. The U.S. residential price increases by about 0.7 percent in 2012.  These price increases are relatively small compared with the average annual growth rate of 3.5 percent over the period of 2000-2009.

CLICK HERE to review the complete EIA Short-Term Energy Outlook.

PRICE TREND DATA....

The U.S. Energy Information Administration (EIA) provides a wealth of infomation which has been quoted in earlier postings and likely will continue to be shared with this audience periodically.  The data is both interesting and valuable. 

The chart provided here is contained in the Short-Term Energy Outlook section.  It depicts the past history and future forecasts relating to the nationwide average residential electricity price annual growth pattern.  Note the steady rise in prices during the past decade and the favorable forecasts for the next two years.  CLICK HERE TO SEE THE CHART.

NATURAL GAS SPOT REPORT....

During the report week (January 5-12, 2011), the Henry Hub spot price increased $0.03 to $4.55 per million Btu (MMBtu).

EIA has reported the projected Henry Hub natural gas spot price averages $4.02 per million Btu (MMBtu) for 2011, $0.37 per MMBtu lower than the 2010 average. It further expects the natural gas market to begin to tighten in 2012, with the Henry Hub spot price increasing to an average $4.50 per MMBtu.

EIA expects the higher forecast production during the first half of 2011 combined with a decline in consumption, to moderate natural gas spot prices. The projected spot price falls to a low of $3.73 per MMBtu in June then rises to $4.61 in December.

U.S. Electricity Retail Prices.  EIA expects the U.S. retail price for electricity, distributed to the residential sector, to increase only slightly above the 2010 average of 11.6 cents per kilowatt-hour by 0.6 percent in 2011 and by 1.0 percent in 2012.

THE WAY IT WAS....

Texans enjoyed electricity rates well below the national average for a number of years preceding deregulation.  For the period '95 to '02, average annual prices fluctuated between 7.7 and 8.1 cents per kWh for the eight years.  The system was cost plus then.  Deregulation has simply added a new layer for profit taking.  Yes, new jobs were created and that is good, but at the expense of Texas consumers.

After Texas restructured its market, prices have remained above the natural average until very recently.  As of September 2010, the latest data available, shows the average price for the residential sector to be 11.49 cents/kWh.  The U.S. average was 11.97.  The commercial and industrial sectors had average prices of 9.07 and 6.11 respectively.  Source: Energy Information Administration

We were promised lower rates after deregulation.  What went wrong?  Comments are invited.

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STATUS OF ELECTRICITY RESTRUCTURING BY STATE

Restructuring means that a monopoly system of electric utilities has been replaced with competing sellers as has been the case here in Texas since 1 January 2002.  This report deals with the status existing in the nation as of September, 2010.  Source for the information is the U. S. Energy Information Administration (EIA).

15 states remain active.  Those states are New York, Connecticut, New Jersey, Rhode Island, New Hampshire, Maine, Massachusetts, Maryland, Delaware, Michigan, Pennsylvania, Texas, Illinois, Ohio and Oregon.  Note the high concentration of states in the North East and Mid-Atlantic.  7 states have suspended their deregulation laws.  These include California, Nevada, New Mexico, Arizona, Virginia, Montana and Arkansas.  With the exception of Virginia and Arkansas, these states are located in the West.

Refer to the following posting to see how Texas ranks with regard to electricity residential prices.

TEXAS ENERGY QUICK FACTS

• Texas is the leading crude oil-producing State in the Nation (excluding Federal offshore areas, which produce more than any single State).  
• The State’s signature type of crude oil, known as West Texas Intermediate (WTI), remains the major benchmark of crude oil in the Americas.  
• Texas’s 27 petroleum refineries can process more than 4.7 million barrels of crude oil per day, and they account for more than one-fourth of total U.S. refining capacity.  
• Approximately three-tenths of total U.S. natural gas production occurs in Texas, making it the Nation’s leading natural gas producer.  Natural gas-fired power plants typically account for about one-half of the electricity produced in Texas and coal-fired plants account for much of the remaining generation.
• Texas also leads the Nation in wind-powered generation capacity; there are over 2,000 wind turbines in West Texas alone.  
• Texas produces and consumes more electricity than any other State, and per capita residential use is significantly higher than the national average.

Source:  EIA.  Data updated as of 2 December 2010