Why have U.S. electricity sales flattened?

Fredrich Kahrl

Energy Policy, 2021, vol. 159, issue C

Abstract: Since the 2007–2009 financial crisis, U.S. electricity sales have remained essentially flat despite economic recovery, with all but five states registering declines in electricity sales growth between the two decades on either side of the financial crisis. This paper examines the factors that contributed to the decline in annual average electricity sales growth from 1997 to 2007 to 2009–2019 across states. It finds that, at a national level, most (∼60%) of the decline in sales growth was in the commercial sector. The factors driving declines in sales growth across states were heterogeneous. The only statistically significant factor (p < 0.05) was a decline in the growth of the number of commercial customers, which occurred in all but two states. Over the last decade, customer count growth slowed across both commercial and residential classes in almost all states. These changes may reflect structural economic and demographic changes and require further analysis. The results highlight the structural economic factors — as opposed to energy efficiency and other technological factors — that are currently shaping electricity demand in the United States. They underscore the importance, for electric utilities, system operators, and their regulators, of developing more effective strategies to manage load forecast uncertainty.

Keywords: Electricity demand; Load forecasting (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:159:y:2021:i:c:s0301421521005188

DOI: 10.1016/j.enpol.2021.112653

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