News

EIA: Electricity Demand Seen Dropping 1.6% In '09

> Dow Jones & Company, Inc. - Apr 14
>
> U.S. electricity demand is expected to drop 1.6% this year, as
> the
> national recession and an expected milder summer push consumption
> lower, the
> U.S. government said Tuesday.
>
> In its monthly Short-Term Energy Outlook, the Energy Information
> Administration also slightly raised its outlook for residential power
> prices, forecasting a 1.8% rise this year. Last month, the agency
> estimated
> a price increase of 1.1% for 2009. The forecast for 2010 remained
> the same
> with the EIA projecting a 1.8% increase in residential prices.
>
> "The reduction in electricity sales has increased the average
> cost of
> electricity for many utilities. Under cost-of-service regulation,
> fixed
> capital costs are spread out among a declining number of kilowatt
> hours, in
> some cases offsetting the reduction in variable fuel costs," the EIA
> said.
>
> The EIA had projected a 1.7% drop in demand for the year in its
> March
> outlook. For 2010, it sees power consumption growing 1.4%. The EIA
> last
> month forecast a 1.2% increase for next year.
>
> As for the mix of power plant fuels, the agency expects a 1.6%
> increase in electricity generated from natural gas in 2009 because
> of a
> sharp drop in the fuel's price. Coal-fired generation conversely
> will see a
> 3.2% decrease in 2009.
>
> The EIA continued to lower its outlook for U.S. coal production,
> forecasting a decline of 5.3% this year. The drop is being driven by
> declining domestic demand and lower exports. Improved economic
> conditions in
> 2010 should result in production growing 2.3%. The EIA in its March
> outlook
> projected coal production to decline 4.9% this year, while growing
> 1.8% in
> 2010.
>
> U.S. coal exports are projected to decline 11% this year as
> global
> demand slows and production returns to normal in countries that faced
> disruptions. Exports should come back with the global economy,
> increasing
> 11% next year, the EIA forecasted. The EIA last month projected a
> 11.8%
> decrease in exports in 2009 and a 12% rise in 2010.
>
> Slumping power demand and growth in electricity generation from
> other
> sources should result in a 2.6% drop in coal consumption by the
> power sector
> this year. Coal consumption by generators is forecast to climb 1.1%
> in 2010.
> The EIA had forecast last month a 1.7% decline in coal consumption
> by the
> power sector in 2009 and 0.4% increase in 2010.
>
> -By Mark Peters, Dow Jones Newswires; 201-938-4604;
> mark.peters@dowjones.com