Electricity Price Index Soars to New Record at Start of 2014; U.S. Electricity Production Declining
(CNSNews.com) - The electricity price index soared to a new high in January 2014 with the largest month-to-month increase in almost four years, according to the Bureau of Labor Statistics.
Meanwhile, data from the Energy Information Administration, a division of the U.S. Department of Energy, indicates that electricity production in the United States has declined since 2007, when it hit its all-time peak.
The U.S. is producing less electricity than it did seven years ago for a population that has added more than 14 million people.
“The electricity index rose 1.8 percent, its largest increase since March 2010,” said BLS in its summary of the Consumer Price Index released Thursday.
In December, the seasonally adjusted electricity index was 203.740. In January, it climbed to a new high of 207.362.
Back in January 2013, the electricity price index stood at 198.679. It thus climbed about 4.4 percent over the course of a year.
Last month, the average price for a kilowatthour (KWH) of electricity in a U.S. city also hit an all-time January high of 13.4 cents, according to BLS. That marks the first time the average price for a KWH has ever exceeded 13 cents in the month of January, when the price of electricity is normally lower than in the summer months.
A year ago, in January 2013, a KWH cost 12.9 cents. The increase in the price of a KWH from January 2013 to January 2014 was about 3.9 percent.
During the year, the price of a KWH of electricity usually rises in the spring, peaks in summer, declines in fall, and is at its lowest point in winter. In 2013, the average price of a KWH in each of the 12 months of the year set a record for that particular month. January 2014's price of 13.4 cents per KWH set a new record for January.
Historically, in the United States, rising electricity prices have not been inevitable. In the first decades after World War II, the U.S. rapidly increased it electricity production, including on a per capita basis. Since 2007, the U.S. has decreased its electricity production, including on a per capita basis.
In the 1950s and 1960s, when U.S. electricity generation was increasing at a rapid pace, the seasonally adjusted U.S. electricity price index remained relatively stable. In January 1959, the electricity index stood at 29.2, according to BLS. A decade later, in January 1969, it was 30.2—an increase of 3.4 percent over a 10-year span.
That 3.4-percent increase in the index from January 1959 to January 1969 was less than the 4.4 percent the index increased from January 2013 to January 2014.
Over the last seven years, according to the EIA, the U.S. has actually decreased its total net electricity generation, although not in an unbroken downward line from year to year (generation did increase from 2009 to 2010 before going down again in 2011 and 2012).
The EIA has published historical data going back to 1949 on the nation’s annual total net electricity generation, which EIA measures in million kilowatthours.
In 1949, according to EIA, the U.S. produced 296,124.289 million KWH of electricity. By 1959, it produced 713,378.831—an increase of 417,254.542 million KWH or about 141 percent.
In 1969, the U.S. produced 1,445,458.056 million KWH—an increase of 732,079.225 or about 103 percent from 1959.
In 1979, the U.S. produced 2,250,665.025 million KWH—an increase of 805,206.969 or about 55.7 percent from 1969.
In 1989, the U.S. produced 2,967,146.087 million KWH—an increase of 716,481.062 or about 31.8 percent from 1979.
In 1999, the U.S. produced 3,694,809.810 million KWH—an increase of 727,663.723 or about 24.5 percent from 1989.
In 2009, the U.S. produced 3,950,330.927 million KWH--an increase of 255,521.117 or about 6.9 percent.
In 2007, according to EIA, the U.S. generated a net total of 4,156,744.724 million KWH of electricity, which, so far, is the historical peak. In 2012, the last year for which full data is available, the U.S. generated a net total of 4,047,765.26 million KWH. That represents a drop of 108,979.464 million KWH--or about 2.6 percent--in the nation’s electricity production since 2007.
CNSNews.com divided the million KWH of electricity generated each year in the United States, according to EIA, by the number of people in the U.S. population as of July of that year (as estimated by the Census Bureau) to derive a number for per capita electricity production (see chart).
As with overall electricity production, per capita production exhibited decelerating growth over the decades, peaked in 2007, and has since declined.
From 1950 to 1959, per capita total electricity generation (in million KWH) grew by 83.11 percent; from 1960 to 1969, it grew by 69.76 percent; from 1970 to 1979, it grew by 33.51 percent; from 1980 to 1989, it grew by 19.25 percent; from 1990 to 1999, it grew by 11.25 percent.
From 2000 to 2009, per capita total net electricity generation in the United States declined by 4.45 percent.
In 2007, when U.S. electricity generation peaked at 4,156,744.724 million KWH, per capita production also peaked at 0.013799 million KWH for each of the 301,231,207 people in the country as of July of that year.
In 2012, the U.S. generated 4,047,765.26 million KWH for a population of 313,914,040—for a per capita production of 0.012895. That means per capita electricity production in the U.S. declined by about 6.6 percent in five years.
The downward trend in U.S. electricity production continued into 2013. The EIA’s latest Monthly Energy Review, which includes data through October 2013, indicates that in the first ten months of 2013, the U.S. generated a total of 3,392,101 million KWH of electricity, down from the 3,407,155 million KWH produced in the first 10 months of 2012.
The Monthly Energy Review also indicates that a large part of the decline in U.S. electricity generation has come from a decrease in the electricity produced by coal—which has not been replaced by a commensurate increase in the electricity produced by natural gas or the “renewable” sources of wind and solar.
In 2007, the year U.S. electricity generation peaked at 4,156,745 million KWH, coal accounted for 2,016,456 million KWH of that production—or 48.5 percent of it. Natural gas, then the nation’s second largest generator of electricity, accounted for 896,590 million KWH of total production—or about 21.6 percent.
In 2007, wind generated 34,450 million KWH—or about 0.8 percent of the nation’s supply that year. Solar generated 612 million KWH—or about 0.0147 percent of the national supply.
By 2012, when U.S. electricity generation had dropped to 4,047,765 million KWH, coal generated only 1,514,043 million KWH—or 37.4 percent of the national supply.
Between 2007 and 2012, the nation's annual coal-fired electricity generation declined by about 25 percent, or 502,413 million KWH. The combined increases in natural gas, wind and solar did not make up for this decline. In 2012, natural gas produced 1,225,894 million KWH, up 329,304 million KWH from 2007; wind produced 140,822, up 106,372 million KWH from 2007; and solar produced 4,327 million KWH, up 3,715 million KWH from 2007.
The combined 439,391 million KWH increase in electricity generation from natural gas, wind and solar did not cover the 502,413 million KWH decline in the electricity generated by coal.
Coal was not the only source that produced less electricity in 2012 than in 2007, according to the EIA data.
Electricity from nuclear power plants dropped from 806,425 million KWH in 2007 to 769,331 in 2012—a decline of 37,094 million KWH or 4.6 percent.
Electricity generated from petroleum sources dropped from 65,739 million KWH in 2007 to 23,190 million KWH in 2012—a decline of 42,549 million KWH or about 64.7 percent.
Conventional hydroelectric means of generating electricity hit their peak in 1997, a decade before overall electricity generation peaked in the United States. In that year, the U.S. produced 385,946 million KWH of electricity through conventional hydroelectric power. By 2012, that had dropped to 276,240 million KWH, a decline of 109,706 million KWH or 28.4 percent.