The Energy Information Administration expects electricity sales will jump this year, despite sharp increases in retail and wholesale power prices, according to the agency’s latest short-term energy outlook issued Tuesday.
U.S. electric sales are slated to jump 2.5% this year to a record 3.9 billion MWh because of an improving economy and hot summer weather, the EIA said. It expects sales to dip 0.3% next year.
The U.S. has experienced record-setting heat waves this summer, helping drive up electicity use.
The EIA anticipates residential sales will climb this year to 1.49 billion MWh, up from 1.48 billion MWh in 2021. Commercial sector sales are expected to increase to 1.37 billion MWh this year from 1.32 billion MWh last year and industrial sales are forecast to grow to 1.02 billion MWh from 987 million MWh in the same period, according to the EIA.
The EIA expects residential and commercial sales to dip slightly next year, with industrial sales increasing somewhat.
The agency anticipates residential electricity prices will average 14.6 cents/kWh this year, up 6.1% from 2021, reflecting higher wholesale electricity prices that are being driven up by increased natural gas prices. The average residential price will climb to 14.9 cents/kWh next year, according to the agency’s forecast.
Average electricity prices for the commercial sector are set to grow 6.2% this year to 11.97 cents/kWh from 11.27 cents/kWh last year, according to the EIA. The agency forecasts they will climb to 12.23 cents/kWh in 2023.
Average industrial sector prices will jump 8.7% this year to 7.89 cents/kWh from 7.26 cents/kWh in 2021, according to the forecast. The EIA anticipates they will decline to 7.78 cents/kWh next year.
The EIA expects wholesale power prices will increase in most regions this year. In the PJM Interconnection’s Western hub, for example, the agency forecasts wholesale prices will jump about 90% this year to $86.74/MWh from $45.67/MWh last year.
Wholesale electricity prices in New England and New York are set to climb to about $95/MWh this year from about $52/MWh and $46/MWh last year, respectively, according to the forecast.
The EIA expects wholesale power prices will taper next year in all markets compared to this year.
The EIA said it expects the Henry Hub natural gas price to average $7.54/MMBtu in the second half of this year and then fall to $5.10/MMBtu on average in 2023 amid rising natural gas production.