Price of Electricity Hit Record High in U.S. in 2014

By Terence P. Jeffrey | January 16, 2015 | 12:21 PM EST

(CNSNews.com) - Even as gasoline prices plummeted and the overall energy price index calculated by the Bureau of Labor Statistics declined, electricity prices bucked the trend in the United States in 2014.

Data released today by the BLS indicates that the electricity price indexes hit all-time highs for the month of December and for the year. 2014 was the most-expensive year ever for electricity in the United States.

The annual price index for electricity, published by BLS today, was 208.020. That was up from 200.750 in 2013.

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The seasonally adjusted electricity price index for the month of December was 210.151, according to the BLS. That sets an all-time record for the seasonally adjusted monthly electricity price index. The previous high was 209.341 in March of this year. In December 2013, the seasonally adjusted electricity price index was 203.740.

The average price for a kilowatt hour of electricity in the United States was 13.5 cents in December. That is the highest average price for KWH of electricity in the month of December since the BLS started recording the December monthly price for a KWH in 1978. In December 2013, the average price for a KWH was 13.1 cents.

The average price for a KWH of electricity tends to hit its annual peak in the summer months, decline in the fall, hit its nadir in the winter and rise in the spring. In 2014, the average price for a KWH hit a record high for that particular month in each month of the year. In June, July and August of this year the average price of a KWH hit 14.3 cents—its all-time high for any months on record.

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By contrast, the overall Consumer Price Index declined by 0.4 percent in December with particular help from the decline in the price of gasoline.

“The gasoline index continued to fall sharply, declining 9.4 percent and leading to the decrease in the seasonally adjusted all items index,” said the BLS in its press release on the CPI. “The fuel oil index also fell sharply, and the energy index posted its largest one-month decline since December 2008, although the indexes for natural gas and for electricity both increased.”

The BLS’s price indexes measure relative change in prices against a baseline of 100. The annual electricity price index exceeded 100 between 1983 and 1984, when it rose from 98.9 to 105.3. In the past two decades, the price of electricity in the United States has roughly doubled.

Rising electricity prices have not always been the norm in the United States. In 1913, the BLS annual electricity price index was 45.5. By 1946, it had dropped to 26.6. In 1974, it was still only 44.1—less than it had been six decades before in 1913.

The net production of electricity in the United States peaked in 2007, according to data published by the Department of Energy’s Energy Information Administration. That year, the United States generated 4,156,745 million KWH of electricity.

In 2013, that latest full year on record, the United States generated 4,058,209 million KWH of electricity—or about 2.4 percent less electricity than in 2007

The latest data from the Energy Information Administration, published in December, includes electricity generation numbers through the first nine months (January through September) of 2014. In those nine months of 2014, more electricity was generated (3,117,501 million KWH) than in the first nine months of 2013 (3,077,418 million KWH) or 2012 (3,095,504 million KWH), but less than in the first nine months of 2007 (3,166,614 million KWH).

The composition of the sources of electricity generation also changed between 2007--when the nation produced its peak volume of electricity--and 2014.

In the first nine months of 2007, the U.S. produced more electricity with coal (1,523,714 million KWH) than in the first nine months of 2014 (1,231,795 million KWH).

The U.S. also produced more electricity in the first nine months of 2007 with nuclear power (607,846 million KWH) and petroleum (53,802 million KWH) than it did in the first nine months of 2014, when it produced 596,174 million KWH and 24,953 million KWH from those source respectively.

By contrast the U.S. produced more electricity in the first nine months of 2014 than it did in the first nine months of 2007 by means of natural gas (844,743 million KWH to 688,035 million KWH), conventional hydroelectric (200,614 million KWH to 199,261 million KWH), wood (31,668 million KWH to 28,729 million KWH), waste (14,499 million KWH to 12,723 million KWH), geothermal power (12,170 million KWH to 10,967 million KWH), solar (14,271 million  KWH to 532 million KWH), and wind (133,495 million KWH to 23,522 million KWH).

In the first nine months of 2014, solar power equaled about 0.46 percent of total electricity generation. Wind power equaled about 4.3 percent of total electricity production.

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