Why Have US Electricity Sales Surged in 2018, after Stagnating for Years?

And why was coal left behind?

By Leonard S. Hyman and William I. Tilles, Oilprice.com:

Sales of electricity in the U.S. have barely increased despite nine straight years of economic growth. It almost looks as if the conservation ethos for American consumers has finally taken hold. That restraint also applies to large commercial and industrial customers as well. And foreign consumers seemed even less interested in plugging in. A discouraging drip, drip of bad news for the electricity industry.

Well, something happened. For the eight months ended August, electric consumption in the U.S. actually rose 3.3% compared to last year. In other industries that’s not a high growth number, but for electric utilities with virtually 100% market penetration it constitutes unusually high levels of sales growth. Electric industry participants in recent years have gotten used to 0% as a normal “growth” rate:

What changed? Sales to residential customers rose a spectacular 7.8%, commercial sales rose a solid 2.0% and the U.S. industrial sector, assumed growth engine of the economy, purchased 0.1% less power.

The first part of the year featured unusually cold weather and then a hotter-than-usual early summer. Residential customer load is more sensitive to weather. Individuals and families often adjust their A/C on and off all summer depending on the weather. Heating and cooling accounts of 22% of residential electric sales.

Large commercial and industrial facilities run their HVAC systems constantly, all year round. Heating and cooling, furthermore, account for only 15% of commercial and 7% of industrial electric sales. For them the incremental change in electricity usage is typically modest. So while residential electric loads are more weather sensitive, commercial and industrial electric load tends to be more economically sensitive.

Temperature departures from the heating and cooling norm make a big difference for residential KWH sales. Thus, it looks as if the recent sales surge is weather-induced. Consumer attitudes towards electricity usage were not likely altered. But electric utility customers did respond to temperature extremes in their respective locales in the way we would expect.

How did the electric industry produce that extra electricity sold in the first eight months of 2018? Here is how the production by fuel changed: the industry burned more natural gas, used more solar and wind, used less hydro-power, and burned less coal. That is not an auspicious omen for the Trump administration’s plans to revive coal. It seems that the electricity industry is acclimatizing itself to a low or no coal future, despite the stated intentions of the Trump administration.

The eight months results probably do not portend an upturn in electricity sales due to a change in consumer attitudes with respect to the efficient usage of electricity. But these strong sales results may say something about escalating future power generation requirements due in part to climate variation itself.

Climate change is a topic the once coal dependent electric utility industry has preferred to ignore. But now the industry overall benefits economically with the more rapid decline of coal and increased reliance on natural gas. It seems like an ideal time for industry rebranding. It is not unreasonable to think the local electric utility could one day appeal to consumers as the carbon-free, home-climate-comfort provider operating on both sides of the meter.

No one today, for good reason, thinks of electric utilities as a growth industry though occasional weather extremes, both hot and cold, may propel near term kwh hour sales growth. But the electrification of our transportation system — that’s the game changer for utilities. By Leonard S. Hyman and William I. Tilles, Oilprice.com

This time was supposed to be different. Read… Shale Profits Remain Elusive

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  54 comments for “Why Have US Electricity Sales Surged in 2018, after Stagnating for Years?

  1. 2banana says:

    How many houses in Boston did coal blow up and burn to the ground this week?

    American coal exports are on a tear.

    The coal industry will be around for a long time.

    There is so much of it in America. And technology is always advancing.

    Who would have predicted 10 years ago that America would be the largest oil exporter in the world today?

    • Crysangle says:

      US has much coal, but not so much oil. If you check main sources of known reserves, the US has around five years worth of own supply if it were to not import. The world has around fifty years of known supply at current use, with the US using up a disproportionately large amount of that. Shale supply and the current US boom of production is not going to last too long afaik. I don’t know the natural gas stats for the US or global, but it is a good cleaner source, coal is maybe a fortunate reserve, but I guess the exports are China bound, pays for US goods imports plus is burned to create them? Not very clear of oilprice to say US not using so much coal, when it is really only having it used somewhere else for itself? Would be interesting to know that dynamic.

      • BTilles says:

        Re “but not so much oil”: the US is among the top oil exporting nations in the world with production next year expected to approach 12 million barrels/day.

        • Paulo says:

          Sorry folks:

          Because of unprofitable Shale, (companies have yet to make a dollar producing Shale) The US is currently/briefly the largest oil PRODUCER in the world. However, it is still a large importer of oil. That is to say, it is a net importer, needing imports to supply domestic consumption. The US also has excess refining capacity and exports refined products whose feedstock may or may not have come from other countries.

          There are very very few actual net exporters of oil in the world, and the the US is definitely not one of them.

          These stats are readily accesible.

          “In 2017, the United States imported approximately 10.1 million barrels per day (MMb/d) of petroleum from about 84 countries. Petroleum includes crude oil, natural gas plant liquids, liquefied refinery gases, refined petroleum products such as gasoline and diesel fuel, and biofuels including ethanol and biodiesel. About 79% of gross petroleum imports were crude oil.

          In 2017, the United States exported about 6.3 MMb/d of petroleum to 180 countries. About 82% of total petroleum exports were petroleum products. The resulting net imports (imports minus exports) of petroleum were about 3.7 MMb/d.’


        • Crysangle says:



          All the data is questionable, reserve level may not be accurate, more reserves may be found, the current level might be exagerated or not economically feasible to extract etc.

          The above data does give a very rough ball park view though.

      • robt says:

        Reserves are the equivalent of working inventory. Would any business stock up with 100 years of goods?
        In 1980, reserves were estimated at 5 to 7 years, and we were supposed to run out of oil by 1987. The journalists, and even some analysts, took reserves, divided by consumption, and voila: out of oil in 7 years, just in time for the new Ice Age.

    • Ensign Nemo says:

      It’s a bit misleading to state that the US is world’s largest exporter of oil without also noting that it imports more than it exports, making the US a net importer of oil.

      Here’s a link to the current US oil and oil product imports and exports:


      Every day in the latest week listed, the US imported 10.519 million barrels, of which 7.591 million were crude and 2.928 million were products, mostly refined stuff such as gasoline.

      The US exported 6.688 million barrels, of which 1.828 million were crude and 4.860 million were products.

      We import many more barrels than we export, but the added value from refining means that the exports are more valuable per barrel than the imports, which counterbalances the cost of the imports to some degree.

    • BTilles says:

      The gas explosions and fires in North Andover and Lawrence appear to be due to over pressurization of natural gas lines. Coal does not seem to be directly implicated here.

    • Wolf Richter says:


      Don’t forget:

      How many people die in coal mines every year.

      How many people die of “black lung disease,” also called Coal workers’ pneumoconiosis (CWP), a result of working in coal mines. Here is a grisly account of just some small towns in central Appalachia

      How many people die in coal dust explosions. “The worst mining accidents in history have been caused by coal dust explosions, such as the disaster at Senghenydd in South Wales in 1913 in which 439 miners died, the Courrières mine disaster in Northern France which killed 1,099 miners in 1906, the Luisenthal Mine disaster in Germany, which claimed 299 lives in 1962, and the worst: the explosion at Benxihu Colliery, China, which killed 1,549 in 1942.”

      How many people die from diseases caused by the pollution that results from burning coal…

      And on and on. Coal is a deadly, dirty, and inefficient fuel. Those three factors combined make it an EXPENSIVE fuel to burn; which is why it’s on the way out in the US. There are simply more profitable ways of generating electricity.

      The only good thing is, there’s a lot of it.

      • James says:

        Yes, BUT… through the magic of lobbying and subsidization ANYthing can be profitable, deadly and dirty or not! Petroleum, industrial ag, Amazon & Walmart (food stamps for their slaves and customers), etc. I myself am being subsidized to feed solar power back into the grid. It’s basically a lesbian commie plot. They also have me cooking in a solar oven, which is embarassingly fun!

        But even ignoring my own… strange consumption habits, such a rise in consumption seems surprising. We’ve seen a substantial boom in solar power installations, efficiency gains in new housing construction and retrofits, LED lighting, more people per household… Then there’s the fact that electric heating is “only” about 1/3 of homes. Is it REALLY just the weather? Maybe it was Obama all along! :o

    • kiers says:

      NiSource has been buying back their shares to the tune of 70% of shares outstanding over last 5 years. capex v buyback situation.

    • DV says:

      America is nowhere near being the largest oil exporter. It is in fact among the largest net importers.

  2. OutLookingIn says:

    Cryptocoin Mining.
    It uses tremendous amounts of electricity.
    As a result its driving cryptocoin miners to discover ever cheaper sources.


    • BTilles says:

      Re “coal is just not profitable”: we agree.

    • BTilles says:

      Re crypto mining energy usage: one study we saw estimated it takes about 215 kw hours of electricity to mine a single bitcoin. Given the energy intensive nature of the activity miners will seek out low cost sources of electricity. Pro tip: Louisiana, not Hawaii.

    • BTilles says:

      Re “coal is just not profitable”: we agree.

    • Crysangle says:

      Even though the ideas have been over corporatised, politicised etc., the move to efficiency and renewable is well feasible for a major portion of domestic and industrial use. People will only make that move though when they note traditional sources become clearly more expensive and a burden. For now liquid fuels and centralised power generation are just easier and in most instances more cost effective (if we ignore the related wars etc. ). I welcome a more efficient lifestyle, particularly where you are little dependent on outside suppliers any more. I find it a fun challenge to research and implement energy saving solutions, have found it demonstrates how the normal mindset is both imposed and unnecessary, as well as being restrictive and sometimes just wrong in terms of what it costs vs. provides….just an instant convenience that people could not be bothered to think about beating.

  3. Sneaky Pete says:

    Global cooling will bring more demand for heat, not A/C. Heating with electricity isn’t cost effective.

    (And don’t question my global cooling notion–it’s settled science!)

    • PIGL says:

      Settled Science? Evidence, please.

    • Wolf Richter says:

      I assume you’re being sarcastic.

      • BTilles says:

        I’ll be generous and give Mr. Pete partial credit for the observation that electric heat is far less efficient.

        • RangerOne says:

          He just said it’s more expensive which it definitely is. But in south western climates I’d switch to electric heating in a heart beat with a sufficient solar panel setup.

          Not as sure in a place with harsh weather and lots of clouds…

        • Crysangle says:

          Ranger – where there is low solar energy, proper build and insulation, recycling by heat extraction from outgoing air etc. are the tools used. Solar electric is not good for heat generation, panels are expensive and only process a portion of the energy reaching them. If you look at solar heating principles, like hot water but can be air, they are just a dark surface insulated so the heat generated goes your way. Some ideas for air heating are very simple and work, but you do need some sun! For ac there is the absorption technique which is non electrical, it is promising as an eventual solution. Simpler is swamp cooling, but you get some humidity into the bargain, ok in a dessert, but not in the tropics – maybe some hybrid idea of that will be created, who knows. For fridges there is one project where a freezer gets moded to a fridge using a fraction of normal electricity, enough for a smaller panel to run. Sounds all a bit rigged up, but when done properly is not at all so. You have to be very honest with all your calculations is a main point though, plus give extra margin. Usually for short exceptional heat or cold people just light a fire, or put on extra clothes, take it easy and have cold showers, restrict activity to morning and evening etc. Where I live is hot for months on end, and you just naturally acclimatise to that also… those who don’t will want a slightly cooler home though…can be done…apart from the above just shading around a house helps lots. Simple answers.

        • Lance Manly says:

          If you are running a high efficiency heat pump then the only thing cheaper is natural gas.

        • Crysangle says:

          Will just add that you have to be prepared to read up on the nitty gritty of it all to get a good bargain. The reason for that is that consumer houses are priced for low initial cost only, but consumer energy saving appliances are still often at speciality prices unless they have become a mass market (e.g. led). So for example on the very small house which is also my test bed, I am looking for air heat exchangers, and they start in the high hundreds of dollars… so online I take a small home make design and build it…. about twenty dollars and forty hrs work total installed …. it draws 2 watts of electricity, fits out of way, recuperates towards three quarters of outgoing heat in air (or cools hotter incoming air in summer), and silently fan ventilates a room 20m2 with 80m3 ( roughly… from memory) of fresh air an hour. Runs continuously for years so far, and the effect on air quality and temperature is well noticed. This is just to emphasise that it is good to read around what is possible, what is being done, and use own skills to improvise some if you enjoy that , or if you want to avoid exorbitant prices. At the end of it you don’t have anything amazing to show off either ( though if you self build to high quality that is rewarding as well) , but that is not the point. Mostly there is just a kind of practical satisfaction to be had… you have created a home you know inside out, that makes sense and that is not a constant future drain on expenses.

        • Crysangle says:

          Lance – what really made the difference for me was not just disconnecting from the grid, but also purposefully keeping to 12v instead of rigging up a (supplied) inverter. It is like working with a different currency because the consumer world is all calculated at standard alternating high voltage. It is admittedly learning the hard way at times , so not what most people choose because they want something instant guaranteed tried and tested and worth a premium, but it definitely is proper learning. :-)

        • Mean Chicken says:

          Some practical math FWIW; 2 Watts is .006824k BTU/hr, 3 Tons is 36k BTU/hr and 10k BTU/hr is 2.930k Watts thus a 3T heat pump consumes 10.55kW

          Further, humidity here has not been under 90% this summer aside from briefly I caught it about 85% a couple times. This teaches one to cherish any opportunity to dry out thus forget about a steamy swamp cooler, less useful than a heatpump on the South Pole!

          As far as the heat pump goes, my milking machine (3T heat pump) contributes close to nothing during the coldest three months of winter and becomes a block of ice (save for the defrost cycle) during the other three.

        • Mean Chicken says:

          Further, my property tax bill is about twice my total electric bill (an all electric home) and more than half of my electric bill is comprised of fees and taxes.

        • Lance Manly says:

          Mean Chicken – That is a straight calculation that does not take into account CoP, which is the power output/power input. Typically for heat pumps this ranges from 2 to 4 depending on the inside and outside temperatures. So using an average of 3 that would make that KW usage about 3.3 KW. I have practical experience in that I have a 5 ton pump that uses a bit over 5KW when running, I also have about 6KW solar array. If the heat pump is running and the array is near max production the monitoring system shows little no grid consumption.

    • robt says:

      The scientists are easing into it. The ‘settled science’ has alternated between a new ice age and global warming for the last 120 years or more, during which ‘science’ evolved into a priesthood, and not incidentally, a rationale for creative taxing.
      In the famous 1975 Newsweek article it was suggested to spread coal dust over the Artic to attract heat. Also we should have been stockpiling food because everyone was going to starve. A couple of years ago, a ‘climate scientist’, whatever that is, suggested we put windmills all over the Arctic at a cost of a trillion dollars to cool it down. Or something.
      The cycles seem to be generational, which is to be expected, because the last generation knew nothing and the current generation always knows everything. As usual, Mark Twain had something amusing to say about that.
      There have been a lot of global cooling stories in the last few years. A current example, but there are many more, and they are gaining momentum (suddenly from no ice in the Arctic to record ice):

      Amusing headlines from the past:
      I did actually look up many of the articles, or synopses if they’re behind a paywall of a publication that I’d probably never visit again.

  4. Colin says:

    My understanding is it requires more energy over time to acquire the same amount of coal. When you must use up more energy to acquire coal than the amount of energy the coal produces(expected in a few decades), it’ll become useless.

    • BTilles says:

      In general, your argument about requiring more energy prob. applies better to the oil industry than the coal industry. For example, sone new, big offshore oil reserves are below 20,000 feet of ocean–and then you drill. These extreme conditions I suspect are far more expensive and challenging than most coal extraction.

    • No Free Lunch says:

      This is true of any non-renewable natural resource. The more that gets extracted, the harder (and more expensive) the next extraction is, the harder the competition is with alternatives. The time that can be upset is when there is a more dominate extraction for something else, then the economics of the more minor extraction break down. For example, under Texas law, a well in the Permian can flare for 6 months before it must be hooked up. The more dominant resource there is oil, by they have to hook up the gas, even if it reduces profit. Thus the price of gas at the Waha hub in West Texas is $1.24. That “artificially” depressed price would make gas wells on their own in West Texas unprofitable. That low price also creeps into the rest of the US gas market, influencing those economics. If oil extraction in West Texas were to stop, the price of gas would go up. If you want to see a similar interlinked phenomena, lookup how cobalt is mined. Cobalt is an essential metal needed for lithium batteries. Just like natural gas, cobalt is “hitch hiking” on copper production, thus cobalt’s price is dependent on copper production.

  5. jb says:

    excellent contribution : After a cursory glance of the headline I thought the increase might be due to electric cars and crypto mining . The further adoption of LED lightening might offset the increase from climate change . But I reflected upon my usage statistics here in west central Florida (nature coast) and yes we had an unusually colder winters and hotter/humid summers as of late. Most hvacs in Florida are all electric. The question arises though: “are we ready for climate change”. the normal seasonal patterns are being disrupted. thanks

    • Mean Chicken says:

      Long ago I had an natural gas central AC unit and it worked great! Eventually, it developed a leak and spewed it’s ammonia across the yard.

  6. RangerOne says:

    The heatwave this summer was hellish. But I am proud of my wife for getting through it with near zero AC use and just a portable room AC for refuge ar the worst extemes.

    • Gene says:

      My wife and I have lived in northern VA for eight years. This is the first summer when nearly every day was very hot and humid. Usually, there’s some relief. But this year, I didn’t feel like going anywhere during mid and late afternoon hours. I look forward to fall and winter. The house is protected front and rear by large shade trees, so at least the AC bill stayed reasonable. The house is 100% electric.

  7. Winston says:

    OOPS! Left my oven on. Sorry…

    But, seriously, cryptocurrency mining? Business optimism related growth just as with the heavy truck order boom which began on Nov 2016 (prez election results)?

  8. Bet says:

    The environmental toll of fracking is catastrophic. I know. My former farm
    All 600 acres of it a once crop producing land is a toxic dump. Now Harboring a multi acre fracking pond and a production storage station for neighboring fields.
    On the path of the eastern fly way for all the birds that migrate from Mexico during the winter. Now they encounter an even greater methane wall to fly through. I shudder at the years from now health costs from breathing the silicate fracking sands. The polluted water tables. Thank god I no longer live in south Texas I wil be dead in 20 plus years but I mourn the future of the children to come

    • aja8888 says:

      Bret, we have been fracing wells in the U.S. since the early 1900’s. That’s not new as you have to break the rock formation to get oil and gas and other things (sand, water, etc).

      South Texas and the other states where oil and gas are developed will be here and populated for a long time to come. I’ve been in the oilfield for 35+ years and i”m perfectly healthy at 75 years old.

  9. timbers says:

    I mow my lawn with an electric battery mowe. I bought 3 extra rechargeable lithium batteries so I can complete the job in on endeavor. Don’t miss shlepping to get gas and didn’t the smelly dangerous stuff let alone paying for it. Mower is so lite I can carry it up/down the steps from front-back yards. Draw back – it’s narrow so have to push it around more.

    • Wolf Richter says:


      “…it’s narrow so have to push it around more.”

      That’s a POSITIVE, not a drawback. Back in the day, my high-school sweetheart’s dad mowed the lawn as his sole form of exercise. He’d get all sweaty (Oklahoma) and dusty and he loved it. The beers helped too :-]

    • Crysangle says:

      Small handpowered cylinder mowers weigh even less and give a very good cut, but they do make you look a bit outdated and cheap, and need a little more effort… though not much. Mowing the lawn is a bit of a ritual so I won’t be criticising anyone’s choice either…even if it looks like they have plugged in a kitchen appliance to mow, or look like they are pushing a car with its silencer removed around the lawn.

  10. Old Engineer says:

    Sales have “surged” due to longer, hotter summers in the south. And believe me they are longer and hotter. Also houses are larger, offsetting the increases in efficiency in air conditioners. But the biggest growth factor is probably the geographic extension of the use of air conditioning to the north and the increase in air conditioning demand their.

  11. Maximus Minimus says:

    If we apply the statistical knowledge that correlates GDP growth to the electricity consumption, what does it tell us about the real GDP growth, not obfuscated by official inflation?

    • BTilles says:

      Hi Max,
      For a long time the re/ship betw percentage US GDP growth and electricity usage was virtually one to one. Over the past decade or so this re/ship has begun to decouple with electricity usage somewhat underperforming GDP presumably as our economy becomes less industrial and more service oriented.

  12. Ambrose Bierce says:

    No one has mentioned Cannabis, just peek behind your neighbors curtains. The natural suitability of the climate in SoCal is offset by STATE laws to legalize Marijuana which causes counteractive laws at the local level to prevent outdoor cultivation. Hence you can grow all you want, but indoors.

  13. Auld Kodjer says:

    Increase in nuclear is interesting – where “interesting” is a euphemism for whatever you want it to be.

    New plants or higher utilization of existing plants (technical or regulatory)?

  14. Bernadette says:

    Speaking from the viewpoint of a Californian, ‘hidden infrastructure systems are old and worn down’. Many stakeholders do not care, until a serious event happens …


    • Lion says:

      Humm, PG&E, a private company, gets sued for not maintaining their Electrical systems but they get their friends in Sacramento to allow them to have those who are suing, pay for the lawsuits?

      Always great to have friends in high places.

Comments are closed.