What’s Ahead for Electricity Prices This Summer
- May 16, 2019
For commercial real estate operators, the news about electricity costs during the next several quarters may well depend largely on the location of the properties. Customers in three regions are likely to get hit with noteworthy increases, two regions may see modest price drops, and the rest will notice small increases in their bills.
That is the assessment of the U.S. Energy Information Administration’s latest projection of energy pricing patterns, released May 9. Prices may vary within each of the nine regions of the continental U.S.; the estimates reflect the averages of prices within multiple states and metropolitan areas. But the regional estimates offer a useful overview of how electricity costs for commercial customers are likely to trend during the next several quarters compared to the same period of 2018.
Price Hikes Ahead
East South Central (Kentucky, Tennessee, Mississippi, Alabama): In this part of the country, prices will move up nearly half a cent year-over-year during the second quarter, from 10.48 cents per kilowatt-hour in 2018 to 10.94 cents per kWh this year. The third quarter is expected to tell a similar story: 10.34 cents per kWh last year to a projected 10.74 cents this year.
Pacific: Washington, Oregon and California will collectively post a half-cent uptick during the second and third quarters, the largest increase among the nine U.S. regions. Additionally, electricity prices will be the second highest in the country after New England. During April, May and June, prices will rise year-over-year from 14.02 cents per kilowatt-hour in 2018 to 14.52 cents per kWh this year. That pattern will continue during the third quarter, as the average price of electricity jumps to 16.31 cents per kWh from 15.81 last year.
West North Central (Minnesota, North Dakota, South Dakota, Iowa, Nebraska, Kansas, Missouri): Electricity prices will rise from 10.03 cents per kilowatt-hour during the third quarter of 2018 to a projected 10.24 cents this year. Customers will see a medium-sized hike during July, August and September, when prices are estimated to increase year-over-year fom 10.38 to 10.61 per kWh.
Expect an Uptick
New England (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut: retail electricity prices will tick up year-over-year from 15.92 cents per kilowatt-hour in during the second quarter of 2018 to 15.98 cents this year. That trend will continue during the summer months as well with a significantly bigger increase of 25 cents per kilowatt-hour to 16.44 per kWh. All told, average prices in the commercial sector are expected to go up from 16.28 cents last year to 16.41 cents in 2019.
South Atlantic (Maryland, Delaware, West Virginia, Washington, D.C., Virginia, North Carolina, South Carolina, Georgia, Florida): EIA estimates an increase from 9.30 cents per kilowatt-hour in 2018 to 9.38 cents this year. Prices are likely to edge up to 9.24 during the third quarter from 9.18 cents in 2018.
East North Central (Wisconsin, Michigan, Illinois, Indiana, Ohio): Most increases in the next two quarters. Last year, prices during the second quarter averaged 10.15 cents per kilowatt-hour and 10.08 during the third quarter. EIA expects an uptick to 10.34 and 10.22 cents per kWh, respectively.
Mountain: (Montana, Wyoming, Nevada, Utah, New Mexico, Arizona, Colorado, Idaho): In the vast expanse of these western states, a modest year-over-year increase is likely. The average price of 9.88 cents per kWh during the second quarter of 2018 is on track to reach 9.97 cents during the second quarter of 2019. During July, August and September, a comparable year-over-year uptick is projected, as well, from 10.01 cents last year to 10.10 cents per kWh this year.
Middle Atlantic (New York, New Jersey, Pennsylvania): Average prices for the second and third quarters are expected to dip slightly. Last year, second-quarter prices in the region averaged 12.22 cents per kilowatt-hour; this year, the average price is estimated to tick down to 12.10 cents. That pattern will hold in the third quarter, as prices will tick down from 13.17 cents to 12.92 cents per kWh.
West South Central (Texas, Oklahoma, Arkansas, Lousiana): Commercial customers in these four states may be paying a little less for electricity during the next couple of quarters. During the second quarter of 2018, the retail price averaged 8.17 cents per kilowatt-hour. This year, electricity price is on track for a slight dip to 8.12 cents per kWh. EIA projects that trend to continue during the third quarter, as prices slip to 8.02 cents compared to 8.12 cents during the same period last year.