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co-op issues BY STEVEN JOHNSON


Note: This article originally appeared in the electric cooperative trade publication, Electric Co-op Today.


T


he days of the electricity demand boom are over, according to a government analysis.


For the next 25 years, U.S. electricity use will grow by an average of less than 1 percent a year, the Energy Information Administration said in its Annual Energy Outlook 2015.


Lower load growth could spell an increase in retail electricity prices, EIA said, since higher costs to produce and distribute electricity will be spread across fewer kilowatt-hour sales.


“Rising costs for electric power generation, transmission, and distribution, coupled with relatively slow growth of electricity demand, produce an 18 percent increase in the average retail price of electricity over the period from 2013 to 2040,” the agency said.


Electricity prices in 2040 should average 11.8 cents per kilowatt-hour, compared with 10.1 cents per kwh in 2013, EIA said.


Demand Drops But Prices Climb


The agency attributed about two-thirds of the price to wholesale generation costs, with the balance coming from the expense to transmit and distribute electricity.


Regulations such as the Mercury and Air Toxics Standards will add to costs by requiring new emissions control equipment and new generation to replace retired power plants. EIA said the mercury rule and low natural gas prices will lead to the retirement of 31 gigawatts of coal capacity between 2014 and 2016.


Electric cooperatives have generally outperformed the rest of the industry in sales and customer growth, in part because they serve oil-rich boom areas


ENERGY OUTLOOK:


in Texas and North Dakota. However, the overall picture portrayed by EIA indicates electricity demand growth will not return to levels seen in the second half of the 20th century. Ten years ago, the department projected a 1.8 percent annual increase in electricity consumption through 2025.


“Energy-efficiency standards have played a big role in reducing demand,” EIA said. “Residential consumption has also declined as the population has shifted toward warmer climates, reducing the need for space heating,” it added.


The annual report is designed to give policy-makers some hard data. But EIA acknowledged that a variety of factors could conspire to change patterns of use and prices. The study does not incorporate the potential impact of the Obama administration’s Clean Power Plan, which has not been finalized.


Kiamichi Electric wants to keep co-op members up-to-date on the broader issues that impact your electricity costs. For more details on federal regulations and legislation, please visit www.action.coop. Thank you for your support and participation—it can make a difference!


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Contact us today for more details! 800-888-2731 • www.kiamichielectric.org Light Post | may - june 2015 | 7


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