EIA sees US power consumption growing by less than 1% in 2006

EIA sees US power consumption growing by less than 1% in 2006

Washington (Platts)--12Sep2006

US electricity consumption is expected to increase by 0.9% in 2006 from
the prior year, the Energy Information Administration said Tuesday in its
September short-term energy outlook.

The latest forecast marks a slight upward revision from the 0.6% growth
rate the agency predicted in its August report.

Total cooling-degree days are expected to be 1.5% above the 2005 level
this year, EIA said, adding that while cooling-degree days are expected to be
about 6% below those in the third-quarter of 2005, they still will be nearly
12% above normal.

EIA also said it expects electricity consumption to increase by 1.2% in
2007, up from the 1.1% it forecast in its August report.

Further, the agency said residential electricity prices are expected to
increase by 10.2% this year compared with 2006 because the costs of fuels for
electricity generation have risen and retail electricity price caps have
recently been loosened in some states, particularly in New England and the
south Atlantic region, as a result of restructured electricity markets.

In its August outlook, EIA forecast residential electricity prices would
rise by 8.9% in 2006 and by another 3.6% in 2007.

Electric power sector consumption of coal is projected to grow by a
modest 0.3% in 2006, and then increase by another 2% in 2007, EIA said. In
2006, US coal production is expected to grow by 1.9% and remain flat in 2007.

In August, the agency predicted that electric power sector coal
consumption would rise by 0.7% this year and by 1.3% in 2007.

The price of coal to the electric power sector is projected to rise
throughout the forecast period, although at a slower rate than in 2005 and the
first half of 2006, the agency said, adding that coal prices to the electric
power sector are projected to climb from $1.54/MMBtu in 2005 to $1.67/MMBtu in
2007, compared with $1.35/MMBtu in 2004. The numbers were unchanged from the
August outlook.

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