EIA Sees Electric Generation Falling

A warmer winter, combined with what’s expected to be a cooler summer, are leading federal energy experts to predict a decline in American electricity generation this year.

In its Short-Term Energy Outlook, EIA sees a decline in U.S. electricity generation in 2017. (Photo By: Michael W. Kahn)

In its Short-Term Energy Outlook, EIA sees a decline in U.S. electricity generation in 2017. (Photo By: Michael W. Kahn)

The Energy Information Administration said electricity generation fell 1.2 percent during the first quarter of 2017, compared with the same time last year. And EIA points to forecasts of cooler summer temperatures in calling for a 3.3 percent decline in generation during the third quarter of this year versus the same period in 2016.

"Overall, forecast generation falls by 1.2 percent in 2017 and then grows by 1.6 percent in 2018," EIA said in its Short-Term Energy Outlook, released June 6.

Higher than expected natural gas prices are impacting where the nation's electricity comes from. EIA said natural gas will go from accounting for 34 percent of last year's total utility-scale electricity generation to "less than 32 percent in both 2017 and 2018."

Spot natural gas prices at Louisiana's Henry Hub are expected to average $3.16 per million Btu this year, before soaring to $3.41 next year, EIA said.

While natural gas will remain America's dominant source of electricity generation, there are other sources. Non-hydro renewables are expected to provide 9 percent of this year's electricity generation and 10 percent next year, according to EIA. The agency also forecasts coal's share edging up from 30 percent last year to 31 percent in 2017 and 2018.

Meanwhile, your road trip just got more expensive.

For the summer driving season of April through September, EIA now sees a gallon of regular costing an average of $2.46. That's 7 cents more than it forecast in its May Short-Term Energy Outlook. And it's a far cry from last summer's $2.23.

"The higher forecast gasoline price is primarily the result of a higher forecast crude oil price," EIA said.

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