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Summer Electricity Usage to be Lower in The U.S. but Higher in Texas

Nationwide electricity usage is expected to dip this summer even as electricity in Texas is expected to hit record highs.

The U.S. Energy Information Administration is projecting the lowest summer electricity usage in over 10 years across the country.  As with most things in 2020, these numbers are impacted by the Covid-19 pandemic.  Specifically, a decline in usage in the commercial and industrial sectors is expected to decrease overall electricity demand for the country.   Even with states easing stay at home orders, the type of economic activity that drives electricity usage will be slow to ramp up.  The EIA forecast calls for a decline of 12% in commercial electricity usage.  Residential electricity usage is expected to increase 3% as people stay home during the pandemic.

Ordinarily, long term weather forecasts account for the largest part of the government’s forecast of electricity usage.  This year, however, weather is a secondary driver to the unprecedented shifts in lifestyle, manufacturing, and retail activity brought about by the pandemic.

This reduction in electricity demand will also result in a lower utilization of coal.  Coal power plants are often the last sources to come online when demand on electricity grids peak.  This will accelerate the already multiyear trend of natural gas and renewable energy sources taking power market share away from coal.  Coal is expected to account for only 17% of electricity production across the US this summer.  This is compared to 24% in the summer of 2019.

Despite the expected national decline in electricity usage over the summer, Texas officials are predicting record high demand for electricity in Texas. According to ERCOT President and CEO Bill Magness:

“There is a lot of uncertainty in today’s world, but we are confident that Texas will still be hot this summer, Texans will need electric power as they do every summer, and ERCOT is prepared to do our part to keep it flowing reliably.”

Residential electricity usage represents a larger share of Texas energy usage than other parts of the country.  This is because of hot summers and larger houses.  Even though there is no statewide stay at home order in place, many people are still working from home and going out less.

As of June, summer 2020 electricity rates in deregulated parts of Texas are much cheaper compared to last year.   In both the Dallas and Houston areas the average electricity rate listed on Vaultelectricity.com is more than 1¢/kWh cheaper than this time last year for the 1000 kWh usage level.  This translates in to a $10 per month lower electricity bill at 1,000 kWhs per month.

 

 

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