Household electricity expenses to rise this summer

by Talk Business & Politics staff ( 144 views 

The amount U.S. households will spend on electricity this summer (June-August) is expected to rise about 3% to an average of $426, from the same period in 2017, according to the U.S. Energy Information Administration. The rise is expected to be a result of rising retail electricity prices and somewhat higher electricity use to meet a greater cooling demand.

In most areas across the United States, residential electricity usage reaches a peak in the summer months of June, July and August when the use of air conditioners rise for home cooling. Using data from the National Oceanic and Atmospheric Administration (NOAA), the EIA projects the number of cooling degree days from June through August 2018 to rise 2%, from summer 2017. Cooling degree days is a measure of cooling demand, and the summer 2018 projection is 1% less than the average of the previous 10 summers.

The average residential customer is expected to use about 1% more electricity this summer, according to the EIA. Summer temperatures are expected to be warmer throughout the eastern United States, while the western part of the country is expected to be milder. Household electricity use will decline 6% in the Pacific states, and it will rise 5% in the New England states.

Residential retail electricity prices are expected to rise 2% to an average of 13.5 cents per kilowatt hour between June and August 2018, from the same period in 2017. Increased fuel costs for electricity generation, especially for natural gas, have led prices to rise, according to the EIA. Also, the rates are rising as utilities have increased investments into transmission infrastructure. Electricity prices are expected to rise in all regions of the United States.

Natural gas will be the primary fuel for electricity generation this summer and will provide 37% of the generation, up from 35% in summer 2017. The amount of coal-fired electricity generation will be 29%, down from 31% in summer 2017. The change in the share of which fuel will generate the most electricity this summer is a result of additions in natural gas generating capacity and a decline in coal-fired capacity as coal plants have been retired.