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U.S. Reduces Estimate for Electricity Demand in 2012

The U.S. cut its forecast for electricity consumption in 2012 on expectations that moderate weather will reduce residential winter and summer demand, the Energy Department said today.

U.S. electricity demand will average 10.63 billion kilowatt hours a day this year, down from 10.66 billion estimated a month ago, the department’s Energy Information Administration said in its monthly Short-Term Energy Outlook.

The department lowered its consumption estimate for 2011 by 0.3 percent to 10.59 billion compared with the January report.

Total power consumption will “rise slightly” this year demand increases from commercial and industrial users, the department said in the report released in Washington today.

“Temperatures during January were much warmer than normal, particularly in the Southeast, where a large proportion of homes heat with electricity,” the agency said. Projected lower temperatures this summer may reduce residential demand for air conditioning, the agency said.

U.S. power generation will average 11.30 billion kilowatt hours this year, down from last month’s estimate of 11.33 billion.

The estimate for electricity prices paid by residential consumers this year was unchanged from last month’s projection at 11.85 cents per kilowatt hour.

Industrial demand will average 2.71 billion kilowatt hours a day in 2012, up from the previous forecast of 2.69 billion, the federal agency said.

Lower Residential Use

Residential consumption was cut to an average of 3.86 billion kWh per from last month’s estimate of 3.9 billion. Commercial demand will average 3.66 billion this year, unchanged from the last month’s estimate.

Next year the total number of U.S. households is expected to grow 1.3 percent, the highest growth rate since 1999, the department said. This increase will lead to a “relatively strong 2.1 percent increase” in residential power consumption in 2013, the agency said.

Power plants will use less coal and more natural gas this year, according to the report. Gas “remains a relatively inexpensive option” as domestic production increases, the agency said.

Gas will account 24.9 percent of the 10.877 billion kilowatt hours generated by electric power plants this year, up from 23.4 percent in 2011.

Coal’s share will decline to 42.8 percent from 43.6 percent because of low gas prices and concern about environmental regulations, the department said.

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