Electricity Price Index Climbed to New Record in February

By Terence P. Jeffrey | March 24, 2015 | 11:19am EDT

(CNSNews.com) - The seasonally adjusted electricity price index climbed to a new record of 213.009 in February, up from 212.290 in January and from 206.404 a year ago.

The average price for a KWH of electricity—at 13.8 cents—was also the highest it has ever been in the month of February.

Electricity prices have not always risen in the United States.  The Bureau of Labor Statistics’ annual electricity price index, which measures the price of electricity relative to a baseline of 100, was 45.5 in 1913. By 1947, it had dropped to 26.6. By 1974, it had risen to only 44.1—meaning electricity was relatively less expensive in 1974 than it had been in 1913.

ype="node" title="Electricity Price Index-February

Generation of electricity peaked in the United States in 2007, when the nation produced 4,156,745 million KWH of electricity, according the Energy Department’s Monthly Energy Review.

So far, the Department of Energy has only reported the electricity generation numbers for the first eleven months of 2014 (through November). But in those eleven months, the nation produced 3,748,649 million KWH of electricity, which is less than the 3,812,783 million KWH produced in the first eleven months of 2007.

That means the U.S. produced 64,134 million KWH less electricity--or 1.68 percent less--in the first eleven months of 2014 than it did in the first eleven months of 2007. At the same, according to Census Bureau estimates, the population of the United States grew from 301,621,157 in July 2007 to 318,857,056 in July 2014.

There has been a particularly dramatic decline in amount of electricity produced by coal in the United States since 2007. In the first eleven months of that year, the U.S. produced 1,845,881 million KWH of electricity using coal, according to the Monthly Energy Review. In the first eleven months of 2014, it produced 1,463,297 million KWH of electricity using coal. That is a decline of 382,584 million KWHs or 20.7 percent.

ype="node" title="Average Price of KWH by Month

Increased production of electricity using solar and wind sources has not made up for the decline in coal power. In the first eleven months of 2007, the U.S. produced 550 million KWH using solar and 17,811 million KWH using wind—for a combined total of 18,361 million KWH for solar and wind.

In the first eleven months of 2014 that had increased to 17,360 million KWH using solar and 167,044 million KWH using wind for a combined solar-wind total of 184,404 million KWH from solar and wind—an increase from 2007 of 166,043 million KWH in solar and wind power.

That made up for only 43.4 percent of the lost production from coal.

Through November, the 184,404 million KWH of electricity produced in the United States using solar and wind equaled only 4.9 percent of the 3,748,649 million KWH electricity produced in the country in the first eleven months of 2014.

Data released by the BLS today also showed that the average price for a kilowatt hour (KWH) of electricity was 13.8 cents in February. That is the same as the average price in January of this year, but the highest price ever recorded for a February.

The average price for a KWH of electricity tends to hit its annual peak in the summer, decline in fall, hit its low point in winter and rise in spring. In July through November of 2012, the average price for a KWH was less than it had been in July through November of 2011. But in 2013 and 2014, the average price for a KWH set a monthly record in every month of the year. January and February of 2015 have continued that trend—with the average price of a KWH setting monthly records.

ype="node" title="Annual Electricity Price Index

In June, July and August of 2014, the average price of a KWH hit  an all-time record of 14.3 cents.

While electricity prices have been climbing to new records in the United States over the past two years, that has not been the case with other sources of energy. The price indexes for gasoline and fuel oil have declined dramatically over the past year—although they did increase from January to February.

“The energy index rose 1.0 percent in February, ending a series of seven consecutive declines,” said the BLS in its monthly summary of the Consumer Price Index. “The gasoline index turned up after a series of sharp declines, rising 2.4 percent. (Before seasonal adjustment, gasoline prices rose 5.3 percent in February.) The fuel oil index also increased after recent declines, rising 1.9 percent. The electricity index rose 0.3 percent in February after a 0.9-percent increase in January. The only major energy component index to fall in February was natural gas, which declined 2.0 percent following a 3.4-percent decrease the prior month. Despite the February increases, the gasoline and fuel oil indexes have declined sharply over the past year, falling 32.8 percent and 31.2 percent, respectively. The index for natural gas has also declined over the past year, falling 6.5 percent, but the electricity index has increased 3.2 percent.”

The overall seasonally adjusted price index went up only 0.2 percent in February. "Over the last 12 months," said the BLS, "the all items index was unchanged before seasonal adjustment."

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