Electric Sales, Revenue, and Average Price 2008

In 2008, the average retail price for all customers rose 0.61 cents per kWh to 9.74 cents per kWh.  This amounted to a 6.7 percent increase over the 9.13 cents per kWh average retail price paid in 2007, primarily because of the rising costs of the fossil fuels used to generate electricity.  Year-over-year, the average retail price for all customers increased in 47 of the 50 States as well as the District of Columbia, with the exceptions being California, Maine, and Nevada.  California and Maine had a higher than average mix of lower cost hydropower in their electricity supply. Nevada, which observed an average retail price decrease from 10.1 cents per kWh in 2007 to 9.9 cents per kWh in 2008, realized a price decrease in the industrial sector from 8.4 cents per kWh in 2007 to 8.0 cents per kWh in 2008.

In 2008, residential prices increased to 11.26 cents per kWh, or 5.7 percent over 2007.  The average residential price increased by 10 percent or more in 8 States and the District of Columbia.  Regionally, the highest average residential electricity price increase was observed in the East South Central Division.  The New England, Mid-Atlantic, East North Central, South Atlantic, and West South Central Census Divisions all observed increases of between 6 percent and 7 percent.  Average residential prices in the New England and Mid-Atlantic Census Divisions increased 6.0 percent and 6.8 percent respectively.

Nationally, average commercial prices increased from 9.65 to 10.37 cents per kWh, a 7.5 percent increase over 2007.  The largest regional price increase was in the Pacific Noncontiguous Census Division, at 28.0 percent, followed by a 14.8 percent increase in the East North Central Census Division.  By State, the largest increase in average commercial prices was in Illinois, where prices increased 37.6 percent as result of some Illinois utilities reclassifying higher-priced industrial data as commercial in 2008.  Illinois was followed by increases in Hawaii (35.7 percent), Rhode Island (21.2 percent), Virginia (14.7 percent), and Georgia (12.4 percent).

Average industrial prices increased 6.9 percent from 6.39 cents per kWh in 2007 to 6.83 cents per kWh in 2008.  The largest regional price increase in the industrial sector was in the Pacific Noncontiguous Census Division, at 36.1 percent, with Hawaii observing an increase of 41.7 percent from 18.38 cents per kWh to 26.05 cents per kWh in 2008.  Due to its lack of indigenous energy resources, Hawaii uses a substantial amount of imported petroleum products to generate electricity.

Total U.S. retail sales of electricity were 3,733 million MWh in 2008, a 0.8 percent decrease from 2007 to 2008.  Nationally, this decline can be attributed to a slowing economy.   Comparatively, the annual growth in electricity sales in 2007 was 2.6 percent, and the average annual growth rate since 1997 was 1.6 percent.    The 2008 decrease in annual sales from 2007 marks the first time since 2001 that annual sales decreased from the prior year.  This decrease was driven by the residential and industrial sectors, with sales decreases of 0.9 percent and 1.8 percent, respectively.  The significant decrease in the industrial sector was a result of the struggling economy on the industrial and manufacturing complex.  Commercial sales were essentially unchanged, from 1,336 million MWh in 2007 to 1,335 million MWh in 2008.

Total revenues in 2008 increased from $343.7 billion in 2007 to $363.7 billion in 2008 primarily due to the 6.7 percent increase in the average retail price despite a 0.8 percent decrease in total retail sales of electricity.  Revenues for the residential sector increased from $148.3 billion in 2007 to $155.4 billion in 2008.  Commercial sector revenues increased from $128.9 billion in 2007 to $138.5 billion in 2008 and industrial sector revenues increased from 65.7 billion in 2007 to $68.9 billion in 2008.

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