Executive Summary

Generation: Net generation in the United States dropped by 1.9 percent from August 2008 to August 2009. This was the 13th consecutive month that net generation was down compared to the same calendar month in the prior year. The Commerce Department reported that real gross domestic product decreased 0.7 percent from the first quarter of 2009 to the second quarter of 2009. Continuing to reflect this decline, industrial production in August 2009, as reported by the Federal Reserve, was 10.7 percent lower than it had been in August 2008, the 14th consecutive month that same-month industrial production was lower than it had been in the previous year. The National Oceanic and Atmospheric Administration’s (NOAA’s) population-weighted Residential Energy Demand Temperature Index (REDTI) for August 2009 was actually 1.7 percent “above average,” whereas the August 2008 value was “3.5 percent below average consumption.”

The drop in coal-fired generation was the largest absolute fuel-specific decline from August 2008 to August 2009 as it fell by 17,133 thousand megawatthours, or 9.4 percent. Declines in West Virginia, Tennessee, Indiana, Alabama, Florida, Illinois, Wisconsin, and Ohio accounted for 53.1 percent of the national decrease in coal-fired generation. The August decline was the eighth consecutive month of relatively large drops in coal-fired generation from the same month in the prior year, though it was not as precipitous as the drop of 15.3 percent in March or the decline of 15.1 percent in February. Generation from natural gas-fired plants was 9.3 percent higher than it was in August 2008. Gas-fired generation was the largest absolute fuel-specific increase between August 2008 and August 2009. Increases in Pennsylvania, Florida, Alabama, New York, Massachusetts, Virginia, and Arkansas accounted for 58.3 percent of the national increase in gas-fired generation. The second-largest absolute fuel-specific increase – and largest percentage increase – was wind generation, which was up by 60.7 percent over August 2008 totals. The jumps in wind generation in Texas and Iowa accounted for 56.5 percent of the national rise in wind generation. Generation from conventional hydroelectric sources was down by 3.9 percent from August 2008 to August 2009. Nuclear generation was down 0.5 percent. Petroleum liquid-fired generation was down by 2.0 percent compared to a year ago, and its overall share of net generation continued to be quite small compared to coal, nuclear, natural gas-fired, and hydroelectric sources.

Figure 1: Net Generation by Major Energy Source: Total (All Sectors), September 2008 through August 2009

Year-to-date, total net generation was down 4.9 percent from 2008 levels. Net generation attributable to coal-fired plants was down 12.6 percent. Nuclear generation was up by 0.7 percent. Generation from petroleum liquids was down by 7.8 percent, while natural gas-fired generation was up by 2.9 percent year-to-date. The year-to-date wind generation total was up by 27.0 percent.

Figure 2: Net Generation Shares by Energy Source: Total (All Sectors), Year-to-Date through August, 2009

Year-to-date, coal-fired plants contributed 44.4 percent of the Nation’s electric power. Nuclear plants contributed 20.4 percent, while 23.2 percent was generated at natural gas-fired plants. Of the 1.1 percent generated by petroleum-fired plants, petroleum liquids represented 0.7 percent, with the remainder from petroleum coke. Conventional hydroelectric power provided 7.1 percent of the total, while other renewables (biomass, geothermal, solar, and wind) and other miscellaneous energy sources generated the remaining 3.6 percent of electric power (Figure 2).

Consumption of Fuels: Consumption of coal for power generation in August 2009 was down by 9.1 percent compared to August 2008. For the same time period, consumption of petroleum liquids was up fractionally, while petroleum coke fell by 7.1 percent. Consumption of natural gas increased by 9.9 percent.

Fuel Stocks, Electric Power Sector, August 2009

Total electric power sector coal stocks increased between August 2008 and August 2009 by 52.7 million tons. Stocks of bituminous coal (including coal synfuel) increased by 68.2 percent, or 36.7 million tons between August 2008 and August 2009 (from 53.8 to 90.5 million tons). Subbituminous coal stocks grew by 14.6 million tons between August 2008 and August 2009 (from 83.2 to 97.8 million tons). August 2009 was the thirteenth month in a row that coal stocks were higher than the same month in the prior year.

Electric power sector liquid petroleum stocks totaled 43.0 million barrels at the end of August 2009, a decrease of 1.6 percent (0.7 million barrels) from August 2008. August 2009 stocks were 1.1 percent (0.5 million barrels) lower than at the end of July 2009.

Fuel Receipts and Costs, All Sectors, August 2009

In August 2009, the price of coal and natural gas to electricity generators decreased slightly from the previous month, while the price of petroleum increased by 6.4 percent. Receipts of all three categories of fossil fuels increased from July to August.

The average price paid for coal in August 2009 was $2.22 per MMBtu, down 0.9 percent from the price paid in July. It was 1.8 percent higher when compared with the August 2008 price of $2.18 per MMBtu. The average prices for coal normally do not fluctuate significantly from month to month or even year to year except when there are severe weather conditions which affect the transportation of coal, or strikes in the mining or transportation industries. It is much more common to see significant fluctuations in the deliveries of coal to electricity generators. The August 2009 receipts, however, showed only a modest increase (3.7 percent) when compared with July 2009 data and a decrease of 9.5 percent from August 2008.

The average price paid for petroleum liquids increased from $11.29 per MMBtu in July 2009 to $12.01 in August. This was a 6.4-percent increase from July. More notably, there was a 38.8-percent decrease in price from August 2008. This large decrease was actually a return to more normal levels. During most of 2008, the Nation experienced remarkably high petroleum prices attributable to high world demand. Receipts of petroleum liquids in August 2009 were 5.1 million barrels, an increase of 19.2 percent from July 2009. One would expect an increase from August 2008 due to the more reasonable prices but, in fact, there was a 5.8-percent decrease. This can be attributed to lower U. S. demand for petroleum.

The average price paid for natural gas by electricity generators in August was $4.09 per MMBtu, a 4.4-percent decrease from the July 2009 level of $4.28 and a 55.2-percent decrease from August 2008. Like petroleum prices, natural gas prices are returning to normal. During 2008, the high prices of petroleum drove up the demand for natural gas, thereby driving up gas prices. Receipts of natural gas were 940.6 million Mcf, up 7.4 percent from July 2009 and up 8.6 percent from August 2008.

The overall price paid by electricity generating plants for fossil fuels was $2.99 per MMBtu in August 2009, a 0.9-percent decrease from July 2009 and a 34.4-percent decrease from August 2008. Year-to-date (January through August) 2009 prices compared to the same period last year were up 11.4 percent for coal, down 44.4 percent for petroleum liquids, and down 53.6 percent for natural gas. Year-to-date 2009 receipts compared to the same period last year were down 5.9 percent for coal and 2.5 percent for petroleum liquids. Natural gas year-to-date receipts were up by 1.5 percent.

Figure 3: Electric Power Industry Fuel Costs, September 2008 through August 2009

Sales, Revenue, and Average Retail Price, August 2009

The average retail price of electricity for August 2009 was 10.40 cents per kilowatthour (kWh), 0.2 percent lower than July 2009 when the average retail price of electricity was 10.42 cents per kWh, and 2.4 percent lower than August 2008, when the price was 10.66 cents per kWh. Retail sales between August 2008 and August 2009 decreased 2.3 percent led once again by a 7.7-percent decline in the industrial sector. The average price of residential electricity for August 2009 decreased 0.1 cents per kWh to 12.05 cents per kWh from August 2008 and was up from 11.96 cents per kWh in July 2009. At 12.05 cents per kWh, the average residential price of electricity decreased by 0.8 percent from August 2008.

Sales: For August 2009, sales in the residential sector decreased by 0.3 percent, while sales in the commercial and industrial sectors decreased by 0.8 and 7.7 percent, respectively, as compared to August 2008. For the month, total retail sales were 342.9 billion kWh, an increase of 6.8 billion kWh from July 2009, and a decrease of 2.3 percent or 8.0 billion kWh from August 2008. Year-to-date 2009 sales were 2,405.3 billion kWh, a 4.7-percent decrease from the same period in 2008.

Revenue: Total retail revenues in August 2009 were $35.7 billion, reflecting a decrease in revenue of 4.7 percent from August 2008, and a 1.8-percent increase from July 2009. For August 2009, residential sector retail revenues decreased 1.1 percent from August 2008, while the commercial and industrial sector retail revenues decreased by 5.1 percent and 13.3 percent, respectively. Year-to-date 2009 revenue decreased by 2.2 percent from the same period in 2008.

Average Retail Price: For the month, average residential retail prices increased to 12.05 cents per kWh from 11.96 cents per kWh in July 2009, although they were 0.8 percent lower than August 2008 when the price was 12.15 cents per kWh. The August 2009 average commercial retail price was 10.60 cents per kWh, a 4.3-percent decrease from August 2008 and down 1.1 percent from July 2009. The average industrial retail price for August 2009 declined to 7.17 cents per kWh, a 6.0-percent decrease from August 2008 but marginally up from 7.12 cents per kWh in July 2009. Year-to-date 2009 average retail prices increased to 10.01 cents per kWh, a 2.7-percent increase over the same period for 2008 (Figure 4).

Figure 4: Average Retail Price of Electricity to Ultimate Customers by End-Use Sector, Year-to-Date through August 2009 and 2008

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