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Energy Information Administration

Demand Growth and the New Normal

Byline: 

Ahmad Faruqui and Eric Shultz

Magazine Volume: 
Fortnightly Magazine - December 2012

It’s tempting to attribute the recent slowdown in electricity demand growth entirely to the Great Recession, but consumption growth rates have been declining for at least 50 years. The new normal rate of demand growth likely will be about half of its historic value, with demand rising by less than 1 percent per year. This market plateau calls for a new utility strategy.

Image: 
Figure 1 - Electricity Sales Growth (Two-Decade Distributions)
Figure 2 - Cumulative Demand Growth (2010-2035)
Figure 3 - Arc of Price Responsiveness
Figure 4 - Impact of Codes and Standards on Electricity Consumption
Figure 5 - Efficiency Gains of ENERGY STAR Qualified Models
Figure 6 - ERCOT Loads in Texas (3/9/11 and 8/3/11)
Author Bio: 

Ahmad Faruqui is a principal at The Brattle Group, and Eric Shultz is a research analyst. This article was revised from Faruqui’s presentation at the Goldman Sachs Power & Utility Conference on Aug. 14, 2012. The authors acknowledge research assistance by Jennifer Palmer.

Category (Actual): 
DR & Conservation
Strategy & Planning
AMI (Smart Meters)

Five forces are putting the squeeze on electricity consumption.

Gas Without Regrets

Byline: 

Gregory C. Staple & Patrick Bean

Magazine Volume: 
Fortnightly Magazine - November 2012

Gas-fired generators and suppliers alike can each share risk and reward from historic low prices with contracts that blend market and fixed prices

Image: 
Figure 1 - Coal and Natural Gas Generation (January 2005 through October 2013)
Figures 2 - 4 - Fixed, Collared, and Hybrid Agreements
Figure 5 - Maximum Regrets for Electricity Generators and Gas Suppliers
Figure 6 - Potential for Locking-In Affordable Gas-Fired Power
Category: 
Energy Risk & Markets
Sidebar: 
Sidebar Title: 
Presuming Prudence
Sidebar Body: 

In 2010, Colorado Gov. Bill Ritter signed the Clean Air-Clean Jobs Act, which, among other things, explicitly encouraged long-term gas supply contracts. The law specified procedures for commission approval and discouraged subsequent look-back by future commissions.

In April 2012, the Oklahoma Corporation Commission approved a competitive procurement rule that created new opportunities to enter long-term contracts for natural gas and other fuels. The rule created “an open, transparent, fair, and nondiscriminatory competitive bidding process” that would enable Oklahoma utilities to obtain a presumption of prudency for approved agreements.3

A report recently released by the National Regulatory Research Institute noted the proactive measures taken by Colorado, Oklahoma, and Oregon to promote long-term natural gas contracts, while the majority of state commissions provide little guidance.4 – GS and PB

Author Bio: 

Gregory C. Staple (gstaple@cleanskies.org) is the CEO and Patrick Bean (pbean@cleanskies.org) is an energy policy advisor at the American Clean Skies Foundation.

Category (Actual): 
ETRM & Markets
Natural Gas
Rate Cases

How suppliers and generators can each gain from today’s historic low prices.

OP-ED: Green Security

Distributed Renewables: A National Imperative
John Joshi and Malay Bansal, CapitalFusion Partners LLC
For decades, America’s national security has been closely linked with our energy policies. Sustainable energy resources -- especially local, renewable options -- represent a lynchpin in the country’s future security. As such, it’s time to re-think the way we’re financing renewable investments.
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