Dow Jones & Company, Inc. - Jul 11

Electricity use in the U.S. is expected to grow 0.6% this year and an additional 1.4% in 2007, while residential electric rates are likely to continue rising, the U.S. Energy Information Administration reported Tuesday.

Total U.S. demand for electricity is likely to grow from 3,830.2 billion kilowatt-hours in 2005, to 3,851.4 billion kWh in 2006, and to 3,904.3 billion kWh in 2007, the EIA predicted in its monthly Short-Term Energy Outlook report.

U.S. residential customers paid about 5.1% more, on average, for electricity in 2005 than they paid the previous year, the EIA said. U.S. residential customers paid, on average, about 9.43 cents per kilowatt-hour, up from about 8.97 cents per kWh in 2004. They can expect their electric bills to rise another 7.8% this year - to 10.16 cents/kWh - and an additional 2.9% in 2007, to 10.46 cents/kWh, the agency said.

Sharply higher prices for natural gas and other fuels used for generating electricity, particularly at peak times, along with high summer demand for those fuels, drove electricity prices higher in 2005, the EIA concluded. The same factors are likely to boost residential electric rates this year, the agency said. The EIA added that "delivered" residential prices - not based on fuel prices - are likely to contribute to higher rates in 2006.

-By Cassandra Sweet; Dow Jones Newswires; 201-938-4427; cassandra.sweet@ dowjones.com