Power suppliers and consumers can expect to pay higher wholesale and retail electricity prices this winter in nearly every region of the country, according to the Energy Information Administration.
Between December and February, increases in on-peak wholesale electricity prices are expected to range from 33% in California to more than 60% in some areas of the mid-Atlantic and central regions, EIA said in its latest Short-Term Energy Outlook.
The residential electricity price is expected to average 14.5 cents per kilowatt-hour—6% higher than last winter.
“Retail prices grow less than wholesale prices because of regulatory and contractual factors that vary widely across the United States," EIA said in the Dec. 6 report. “Price increases range from almost no change in the West North Central region to 18% in New England."
Natural gas spot prices at Henry Hub are expected to increase due to higher winter demand and rising liquified natural gas exports. EIA estimates that spot prices will average more than $6 per million British thermal units (MMBtu) during the first quarter of 2023, up from November's average of about $5.50/MMBtu.
But the spike will be short-lived as natural gas prices “begin declining after January as U.S. storage levels move closer to the previous five-year average, largely as a result of rising U.S. natural gas production," the report said.
In its analysis of the generation mix, EIA expects wind and solar to account for 14% of generation this year, growing to 16% next year. “Increasing generation from renewable energy, along with retirements reducing the available capacity of coal-fired power plants, contribute to our forecast that coal's generation share will fall from 20% this year to 19% in 2023," EIA said.
EIA's forecast says a gallon of regular gasoline will average about $3.50 in 2023. Gasoline prices finished November at their lowest price since February 2022 due to falling demand and more processing of crude oil at U.S. refineries.