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While prices at the pump have been creeping downward recently, drivers will likely have to wait until next year for significant relief, according to the Energy Information Administration.
A gallon of regular gasoline is expected to average $3.57 in 2023, compared to $4.05 for 2022, said the EIA’s latest Short-Term Energy Outlook. During the first six months of 2022, gasoline prices averaged $4.11 per gallon, compared to $2.78 for the same period last year.
Higher electric bills are also in store for residential consumers. EIA predicts an average of 14.4 cents per kilowatt hour in 2022, up 5.3% from 2021.
“Higher retail electricity prices largely reflect an increase in wholesale power prices driven by rising natural gas prices,” the July 12 report said.
Annual average wholesale prices for 2022 range from $50 per megawatt hour in the Southwest Power Pool market to $85/MWh in the ISO New England market.
Henry Hub natural gas spot prices continued their “historic highs” in the first half of the year, averaging $6.07 per million British thermal units, the report said. “The average price rose each month from January through May, when it reached $8.14/MMBtu before falling to $7.70/MMBtu in June.”
Electricity sales to commercial and industrial sectors are expected to be higher than residential sales, mostly because of stronger economic growth. During the first half of 2022, sales were 5% higher to these two sectors compared to the first half of 2021.
Despite forecasting slower economic growth for the second half of this year, the agency still expects a 3% year-over-year increase in commercial sector sales. In the industrial sector, EIA expects similar increases in sales—4% higher in 2022 than in 2021.
Meanwhile, renewable energy sources, mostly solar and wind, make up the largest increases in electric generation, according to the federal forecast. Renewables are expected to account for 22% of generation in 2022 and 24% in 2023.