Bureau of Labor Statistics

Image

Trends in electricity prices during the transition away from coal

By William B. McClain

The electric power sector of the United States has undergone several major shifts since the deregulation of wholesale electricity markets began in the 1990s. One interesting shift is the transition away from coal-powered plants toward a greater mix of natural gas and renewable sources. This transition has been spurred by three major factors: rising costs of prepared coal for use in power generation, a significant expansion of economical domestic natural gas production coupled with a corresponding decline in prices, and rapid advances in technology for renewable power generation.1 The transition from coal, which included the early retirement of coal plants, has affected major price-determining factors within the electric power sector such as operation and maintenance costs, capital investment, and fuel costs. Through these effects, the decline of coal as the primary fuel source in American electricity production has affected both wholesale and retail electricity prices.

Identifying specific price effects from the transition away from coal is challenging; however the producer price indexes (PPIs) for electric power can be used to compare general trends in price development across generator types and regions, and can be used to learn valuable insights into the early effects of fuel switching in the electric power sector from coal to natural gas and renewable sources. The PPI program measures the average change in prices for industries based on the North American Industry Classification System (NAICS). This article uses industry indexes for NAICS 221110, electric power generation, and NAICS 221122, electric power distribution.2 For tracking changes in prices for power generation, the PPI distinguishes between prices received by power distribution utilities that also generate electric power and non-utility electric power generators. Utility and non-utility generators differ in scale, integration with electric transmission and distribution networks, and fuel mix. For distribution to end-users, the PPI publishes indexes by end-user and census region.3

This Beyond the Numbers article looks at both generation and distribution prices for electricity, from 2004 to 2019. To examine price trends for electricity generation, this article compares utility and non-utility generation price movements. To analyze price trends for electricity distribution, this article compares price movements for different aggregations of regional residential electric power distribution. The article also discusses how prices have varied during the decline of coal, rise of natural gas, and early growth of renewable power as a share of electricity production.

How are electricity prices set?

As with many sectors, it is useful to consider price changes in both wholesale and retail markets. Wholesale prices are received by generators of electric power (e.g., power plants), which may be owned by large utilities that also distribute power or may be independent power producers at stand-alone power plants. Retail prices are received by utilities, cooperatives, and municipalities that purchase the wholesale power for distribution to residential, commercial, and industrial end-users.

Price setting differs significantly across markets, although wholesale price movements typically will pass through to retail prices.4 The majority of wholesale transactions in the United States take place in deregulated markets. Prices are set by frequent and active auctions designed to balance supply and demand subject to the physical constraints of power transmission. Generators of electric power submit selling bids equal to their marginal cost to produce a specific quantity of energy, and distributors (chiefly utilities) submit demand levels. Generator bids are then ordered from lowest to highest until energy supplied is equal to demand.5 Prices are then set by the marginal producer—the generator with the lowest bid that equilibrates supply and demand at a specific pricing node or physical location where bulk power is transformed for distribution to end-users. All suppliers will receive this price, even if they submitted a lower bid. Wholesale prices not set in competitive auctions are taken from long-term bilateral contracts or internal transfer pricing. Most retail prices are set through regulatory proceedings that evaluate a utility’s total asset base and operating costs in order to determine the rates that earn the utility a target rate of return on generation and distribution assets. Rates are frequently set for a year or longer and are a combination of fixed and variable per-unit charges.

For both wholesale and retail markets, frequent drivers of short- and medium-term price changes include demand shifters (e.g., variation in temperature or economic activity), fuel price changes, and unexpected supply shocks (e.g., unplanned maintenance on a power plant or downed power lines). Long-term price changes are primarily driven by long-term trends in demand (e.g., population growth, economic development, or shifting energy conservation preferences), shifts in fuel mix and the corresponding capital investment in generating capacity, and shifts in the policy environment (e.g., introducing or removing subsidies for a particular fuel source).

Changes in electricity prices

Prices used for PPIs in the generation sector reflect the full range of wholesale prices, including prices set by competitive auctions in deregulated wholesale markets, prices from bilateral contracts, and internal transfer prices. As seen in chart 1, wholesale prices for electric power generation first experienced larger annual increases through the mid- and late-2000s, before increasing at slower rates (with significant volatility) since 2010. From 2004 to 2010, generation prices rose 31.7 percent, with 5 of 6 years exhibiting annual increases. Between 2010 and 2019, prices only rose 5.8 percent. (The index also exhibits seasonal volatility, as prices spike in the summer due to high demand for cooling purposes.) During heatwaves, demand can surge to such a point that it strains generation capacity, causing significant price spikes. Smaller peaks occur in the winter, as some regions also use electric power for heating purposes. Prices are typically lowest in spring and fall, when cooling and heating demand are low. Month-over-month volatility is not only a result of shifts in demand; but can also reflect plant retirements or the introduction of new capacity, planned and unplanned shutdowns that reduce capacity, and changes in fuel prices.

View Chart Data

Chart 1. Producer Price Index (PPI) for NAICS 221110, electric power generation, January 2004–December 2019, not seasonally adjusted
Date Electric power generation (primary product)

January 2004

100.0

February 2004

102.4

March 2004

100.4

April 2004

102.3

May 2004

104.1

June 2004

108.0

July 2004

109.6

August 2004

110.3

September 2004

105.1

October 2004

102.5

November 2004

107.2

December 2004

107.1

January 2005

106.1

February 2005

105.2

March 2005

112.2

April 2005

108.8

May 2005

112.0

June 2005

113.9

July 2005

124.8

August 2005

140.4

September 2005

139.6

October 2005

134.8

November 2005

122.9

December 2005

136.7

January 2006

129.1

February 2006

128.0

March 2006

124.9

April 2006

121.6

May 2006

121.6

June 2006

124.2

July 2006

131.2

August 2006

149.1

September 2006

128.8

October 2006

121.4

November 2006

128.5

December 2006

126.7

January 2007

121.2

February 2007

135.0

March 2007

128.1

April 2007

128.0

May 2007

125.8

June 2007

131.1

July 2007

137.3

August 2007

141.1

September 2007

133.1

October 2007

134.0

November 2007

132.3

December 2007

133.9

January 2008

133.1

February 2008

140.5

March 2008

138.7

April 2008

147.2

May 2008

145.7

June 2008

152.1

July 2008

157.1

August 2008

162.8

September 2008

149.5

October 2008

142.7

November 2008

137.2

December 2008

135.1

January 2009

136.0

February 2009

136.2

March 2009

132.5

April 2009

128.0

May 2009

128.0

June 2009

128.6

July 2009

131.0

August 2009

136.6

September 2009

129.5

October 2009

132.2

November 2009

133.4

December 2009

135.5

January 2010

141.8

February 2010

144.2

March 2010

139.6

April 2010

135.6

May 2010

133.7

June 2010

133.8

July 2010

139.2

August 2010

146.6

September 2010

137.6

October 2010

132.2

November 2010

133.8

December 2010

139.3

January 2011

144.9

February 2011

145.0

March 2011

137.4

April 2011

138.4

May 2011

140.6

June 2011

148.7

July 2011

151.6

August 2011

156.5

September 2011

147.4

October 2011

130.7

November 2011

127.5

December 2011

127.4

January 2012

125.3

February 2012

123.3

March 2012

119.1

April 2012

118.2

May 2012

123.8

June 2012

128.1

July 2012

134.4

August 2012

134.0

September 2012

128.9

October 2012

126.1

November 2012

127.6

December 2012

128.5

January 2013

129.0

February 2013

130.0

March 2013

129.5

April 2013

131.9

May 2013

138.0

June 2013

133.7

July 2013

141.9

August 2013

134.9

September 2013

140.0

October 2013

130.4

November 2013

131.7

December 2013

158.2

January 2014

184.1

February 2014

189.9

March 2014

166.4

April 2014

160.9

May 2014

141.3

June 2014

141.3

July 2014

143.8

August 2014

140.9

September 2014

141.2

October 2014

134.3

November 2014

134.7

December 2014

136.6

January 2015

146.4

February 2015

131.1

March 2015

156.9

April 2015

130.1

May 2015

127.3

June 2015

130.5

July 2015

139.3

August 2015

135.7

September 2015

131.4

October 2015

122.8

November 2015

119.6

December 2015

117.8

January 2016

117.5

February 2016

116.2

March 2016

111.5

April 2016

113.2

May 2016

114.1

June 2016

122.3

July 2016

125.0

August 2016

130.2

September 2016

126.4

October 2016

120.9

November 2016

116.6

December 2016

124.4

January 2017

128.9

February 2017

122.8

March 2017

122.6

April 2017

124.4

May 2017

119.8

June 2017

124.1

July 2017

129.5

August 2017

130.3

September 2017

131.2

October 2017

125.9

November 2017

125.8

December 2017

124.7

January 2018

155.0

February 2018

131.5

March 2018

126.1

April 2018

131.1

May 2018

125.3

June 2018

133.4

July 2018

143.5

August 2018

166.4

September 2018

138.4

October 2018

141.0

November 2018

144.6

December 2018

158.3

January 2019

136.7

February 2019

154.1

March 2019

156.3

April 2019

134.2

May 2019

131.2

June 2019

137.7

July 2019

139.1

August 2019

173.3

September 2019

172.4

October 2019

142.6

November 2019

142.2

December 2019

133.3

Note: Data is not seasonally adjusted.

Source: U.S. Bureau of Labor Statistics.

BLS calculates the set of industry PPIs for electric power distribution using sample bills that replicate the monthly charges end-users pay for power. The rates in these bills are overwhelmingly set by regulatory price-setting cases filed with state-level utility commissions. Often at least half of a bill is determined by charges that remain the same for 6 months or longer. Chart 2 shows the monthly industry PPI for electric power distribution from 2004 to 2019.6 In general, there has been a significant upward trend in the prices approved by regulators for distribution companies through this period; although, as with prices for electric power generation, the trend flattened out beginning in 2010. Annual average prices for electric power distribution increased 27.3 percent from 2004 to 2010. Between 2010 and 2019, prices only increased by 17.5 percent. Compared to generation prices, distribution prices demonstrate stronger seasonality. This is due to many distributors having different rates for winter and summer, causing the regular cyclical jump from May to October. This approach to rate-setting has been in place for some time, but the index for electric power distribution suggests that the regularity and magnitude of seasonal pricing has increased over time. There are several possible explanations for this dynamic, such as more distributors introducing seasonal rates over time, regulators being more willing to approve higher seasonal costs, and shifts in the fuel mix in effect during periods of high demand affecting peak prices.

View Chart Data

Chart 2. Producer Price Index for NAICS 221122, electric power distribution, January 2004–December 2019, not seasonally adjusted
Date Electric power distribution

January 2004

100.0

February 2004

100.0

March 2004

100.1

April 2004

100.3

May 2004

101.1

June 2004

104.5

July 2004

104.8

August 2004

105.7

September 2004

105.8

October 2004

102.9

November 2004

101.8

December 2004

102.3

January 2005

103.2

February 2005

103.0

March 2005

103.3

April 2005

103.4

May 2005

104.5

June 2005

108.7

July 2005

109.8

August 2005

110.2

September 2005

110.4

October 2005

109.2

November 2005

109.0

December 2005

109.3

January 2006

112.6

February 2006

113.1

March 2006

112.6

April 2006

113.3

May 2006

114.0

June 2006

118.0

July 2006

118.6

August 2006

118.3

September 2006

118.8

October 2006

114.9

November 2006

112.6

December 2006

112.8

January 2007

114.5

February 2007

115.6

March 2007

114.8

April 2007

115.4

May 2007

117.7

June 2007

122.2

July 2007

122.8

August 2007

122.8

September 2007

123.1

October 2007

119.7

November 2007

118.1

December 2007

118.3

January 2008

119.5

February 2008

118.9

March 2008

120.0

April 2008

121.2

May 2008

123.3

June 2008

126.9

July 2008

129.6

August 2008

129.9

September 2008

129.5

October 2008

127.3

November 2008

125.0

December 2008

125.3

January 2009

126.6

February 2009

126.9

March 2009

125.9

April 2009

125.7

May 2009

127.4

June 2009

129.4

July 2009

130.9

August 2009

130.3

September 2009

130.4

October 2009

127.1

November 2009

125.3

December 2009

125.4

January 2010

125.9

February 2010

126.3

March 2010

127.6

April 2010

128.2

May 2010

129.5

June 2010

134.3

July 2010

135.4

August 2010

135.5

September 2010

135.4

October 2010

130.8

November 2010

128.2

December 2010

128.8

January 2011

129.9

February 2011

130.7

March 2011

131.0

April 2011

131.0

May 2011

132.9

June 2011

136.1

July 2011

137.8

August 2011

138.3

September 2011

137.9

October 2011

134.8

November 2011

132.4

December 2011

132.8

January 2012

132.3

February 2012

132.4

March 2012

132.0

April 2012

131.9

May 2012

133.9

June 2012

136.5

July 2012

139.1

August 2012

139.1

September 2012

139.5

October 2012

135.8

November 2012

134.4

December 2012

135.4

January 2013

134.5

February 2013

134.2

March 2013

134.3

April 2013

134.1

May 2013

136.3

June 2013

140.1

July 2013

140.8

August 2013

140.6

September 2013

140.7

October 2013

137.0

November 2013

135.2

December 2013

135.8

January 2014

138.6

February 2014

137.6

March 2014

139.6

April 2014

138.9

May 2014

141.1

June 2014

145.5

July 2014

146.6

August 2014

147.0

September 2014

146.5

October 2014

143.1

November 2014

139.8

December 2014

140.4

January 2015

142.7

February 2015

142.3

March 2015

142.1

April 2015

141.0

May 2015

142.5

June 2015

149.2

July 2015

149.9

August 2015

149.7

September 2015

148.8

October 2015

143.1

November 2015

140.5

December 2015

140.9

January 2016

139.8

February 2016

138.8

March 2016

140.2

April 2016

138.7

May 2016

140.5

June 2016

145.9

July 2016

147.3

August 2016

147.8

September 2016

148.2

October 2016

143.0

November 2016

141.2

December 2016

141.2

January 2017

144.3

February 2017

145.7

March 2017

146.1

April 2017

144.9

May 2017

148.0

June 2017

152.7

July 2017

153.8

August 2017

153.6

September 2017

152.6

October 2017

148.6

November 2017

146.1

December 2017

146.3

January 2018

148.3

February 2018

149.6

March 2018

147.8

April 2018

146.6

May 2018

149.1

June 2018

155.0

July 2018

155.5

August 2018

154.8

September 2018

153.8

October 2018

149.8

November 2018

146.8

December 2018

148.4

January 2019

149.1

February 2019

148.1

March 2019

148.6

April 2019

147.8

May 2019

149.7

June 2019

155.5

July 2019

155.6

August 2019

155.6

September 2019

154.9

October 2019

147.3

November 2019

145.9

December 2019

145.6

Note: Data is not seasonally adjusted.

Source: U.S. Bureau of Labor Statistics.

The upward trend of regular rate increases for electric power distribution reflects several dynamics.7 Distribution rates typically depend on the value of a utility’s return-generating assets, annual operating and maintenance expenses, and a desired rate of return. These price trends therefore reflect: (1) capital investment intended to maintain, replace, and expand generation capacity, and (2) overall changes in operating and maintenance costs. Variation in distribution prices also reflect changes in generation power prices, which pass through to distribution prices in the form of variable fuel cost adjustments that measure average prices paid for power.

Shifts in fuel mix over time

In the United States, the generation of baseload electricity, defined by the Energy Information Administration as the minimum amount of electric power required to maintain mechanical and thermal efficiency of the grid system, historically was met through large coal-powered plants. Starting in the early 2000s, there was rapid growth in domestically produced natural gas from shale formations and other nonconventional sources.8 As a result, natural gas prices declined 60.1 percent between 2003 and 2019. This, combined with rapid advances in technology for renewable generation, supported a shift away from coal. In addition to being a source of baseload power itself, natural gas has the ability to quickly ramp up, which helps handle intermittency from renewable power sources like the sun or wind. Chart 3 illustrates the share of total U.S. electric power generation from 1990 to 2019, by fuel source. The chart shows the stark decline of coal and the growth in natural gas and renewable power. Relative fuel-mix contributions from nuclear and hydroelectric power sources have both remained relatively flat over the period.

View Chart Data

Chart 3. U.S. fuel mix for electric power generation, 1990–2019
Year Coal Other Petroleum Hydroelectric Renewables Natural gas Nuclear

1990

52.5 0.3 4.2 9.6 2.1 12.3 19.0

1991

51.7 0.4 3.9 9.4 2.2 12.4 19.9

1992

52.6 0.4 3.2 8.2 2.4 13.1 20.1

1993

52.9 0.4 3.5 8.8 2.4 13.0 19.1

1994

52.1 0.4 3.3 8.0 2.4 14.2 19.7

1995

51.0 0.5 2.2 9.3 2.2 14.8 20.1

1996

52.1 0.4 2.4 10.1 2.2 13.2 19.6

1997

52.8 0.4 2.7 10.2 2.2 13.7 18.0

1998

51.8 0.3 3.6 8.9 2.1 14.7 18.6

1999

50.9 0.3 3.2 8.6 2.1 15.1 19.7

2000

51.7 0.3 2.9 7.2 2.1 15.8 19.8

2001

51.0 0.3 3.3 5.8 1.9 17.1 20.6

2002

50.1 0.4 2.5 6.9 2.1 17.9 20.2

2003

50.8 0.5 3.1 7.1 2.0 16.7 19.7

2004

49.8 0.5 3.1 6.8 2.1 17.9 19.9

2005

49.6 0.5 3.0 6.7 2.2 18.8 19.3

2006

49.0 0.5 1.6 7.1 2.4 20.1 19.4

2007

48.5 0.5 1.6 6.0 2.5 21.6 19.4

2008

48.2 0.4 1.1 6.2 3.1 21.4 19.6

2009

44.4 0.5 1.0 6.9 3.7 23.3 20.2

2010

44.8 0.5 0.9 6.3 4.1 23.9 19.6

2011

42.3 0.5 0.7 7.8 4.7 24.7 19.3

2012

37.4 0.5 0.6 6.8 5.4 30.3 19.0

2013

38.9 0.5 0.7 6.6 6.2 27.7 19.4

2014

38.6 0.5 0.7 6.3 6.8 27.5 19.5

2015

33.2 0.5 0.7 6.1 7.2 32.7 19.6

2016

30.4 0.5 0.6 6.6 8.4 33.8 19.8

2017

29.9 0.5 0.5 7.4 9.6 32.1 20.0

2018

27.5 0.5 0.6 7.0 9.9 35.2 19.3

2019

23.4 0.5 0.4 7.0 10.7 38.4 19.6

Note: Data is not seasonllay adjusted.

Source: U.S. Energy Information Administration.

Changes in fuel types used to generate electricity are only one of several forces shaping price trends in wholesale and retail electric power prices. Shifts in demand, technological development, changes to market structure, and policy are all relevant drivers of power prices. Comparing medium- and long-term trends across generator types and regions with different fuel mixes helps demonstrate how price development has varied during the transition away from coal.

Price development by generator type

As described earlier, within the industry PPI for NAICS 221110 there exist two detailed indexes that independently track changes in prices for electric power generation—one for power generation by utilities and the other for power generation by non-utilities. These two PPIs for electric power generation reflect differences in prices by generator type. Utility generators represent legacy firms that operate as vertically integrated utilities that generate, transmit, and distribute electricity. Utilities remain major players in the market, owning many of the large coal, nuclear, and hydroelectric power plants and are still primarily responsible for electric power distribution. That said, expansion of open access to transmission in 1996, which required utilities to charge fair-market rates to competing generators seeking to move energy over the utilities' high voltage transmission networks, has led to growth in the share of energy produced by non-utility generators. Many non-utility generators are independent power producers, which are usually smaller and are more likely to produce power using natural gas and non-hydroelectric renewable energy sources. Both utilities and non-utilities have experienced significant declines in their use of coal to generate electric power, with usage by utilities dropping from 60.4 percent in 2004 to 32.1 percent in 2019; while coal usage by independent power producers declined from 34.0 percent in 2004 to 13.9 percent in 2019. As discussed earlier, coal has been replaced with natural gas and renewable energy, with independent power producers more likely to switch towards renewable energy sources. Independent power producers produced 61.7 percent of their power in 2019 from natural gas and non-hydroelectric renewable energy; compared to 37.3 percent for utilities. In the same year, non-hydroelectric renewable energy sources accounted for 20.1 percent of net generation for independent power producers, compared with 2.5 percent for utilities.9

Chart 4 plots the two detailed indexes for electric power generation from 2004 to 2019. Over this period, non-utility generators did not raise prices as much as utility generators—although they exhibited greater price volatility. Using annual average index data, the non-utility index rose 17.2 percent from 2004 to 2019, while the utility index rose 41.8 percent. Over this period, the utility index never fell below its January 2004 index value, while the non-utility index declined below its January 2004 index value in more than a fifth of the months between January 2004 and December 2019. This difference points to the impact that large quantities of existing coal plants have had on utility-based power generation, while independent power producers with fuel mixes that combine natural gas and renewable energy have been able to take advantage of falling gas prices and improving renewable technology.

View Chart Data

Chart 4. Producer Price Index (PPI) for electric power generation, by generator type, January 2004–December 2019
Date Utilities Non-utilities

January 2004

100.0 100.0

February 2004

103.1 98.0

March 2004

101.7 92.4

April 2004

101.9 104.5

May 2004

102.6 113.1

June 2004

107.1 113.2

July 2004

108.0 119.1

August 2004

109.1 117.3

September 2004

106.2 98.2

October 2004

102.7 101.2

November 2004

107.2 106.9

December 2004

104.8 120.7

January 2005

105.1 111.7

February 2005

105.9 100.8

March 2005

113.2 105.9

April 2005

109.8 103.3

May 2005

111.2 117.1

June 2005

113.1 118.9

July 2005

126.6 114.2

August 2005

142.5 128.3

September 2005

140.2 135.7

October 2005

133.0 145.2

November 2005

122.1 127.5

December 2005

134.1 151.9

January 2006

129.2 128.5

February 2006

129.2 121.3

March 2006

127.6 109.6

April 2006

124.7 103.2

May 2006

126.0 96.0

June 2006

128.1 101.8

July 2006

134.7 111.2

August 2006

153.8 121.8

September 2006

131.6 112.6

October 2006

124.4 104.2

November 2006

130.7 115.4

December 2006

128.0 119.2

January 2007

123.7 111.6

February 2007

135.9 127.9

March 2007

132.1 115.6

April 2007

131.1 117.0

May 2007

131.5 110.3

June 2007

137.4 114.2

July 2007

140.0 126.7

August 2007

150.1 118.7

September 2007

139.2 116.4

October 2007

141.9 114.0

November 2007

136.3 119.6

December 2007

136.6 123.4

January 2008

136.5 121.2

February 2008

141.3 133.2

March 2008

143.3 124.5

April 2008

149.2 137.5

May 2008

149.5 132.8

June 2008

165.8 120.3

July 2008

170.7 125.6

August 2008

172.1 139.0

September 2008

159.2 125.5

October 2008

149.9 123.5

November 2008

142.4 122.0

December 2008

140.4 120.0

January 2009

141.0 121.3

February 2009

145.4 113.6

March 2009

142.2 109.3

April 2009

138.8 103.0

May 2009

140.5 99.5

June 2009

139.9 102.4

July 2009

141.0 107.3

August 2009

150.2 105.9

September 2009

141.6 101.7

October 2009

142.9 107.0

November 2009

140.5 114.9

December 2009

144.0 114.3

January 2010

151.2 118.6

February 2010

150.7 126.2

March 2010

146.7 120.8

April 2010

144.4 113.6

May 2010

145.4 106.6

June 2010

147.4 103.2

July 2010

153.6 106.9

August 2010

163.2 110.0

September 2010

151.7 105.9

October 2010

144.9 103.3

November 2010

145.5 106.7

December 2010

149.9 114.0

January 2011

150.7 126.1

February 2011

150.4 126.9

March 2011

145.9 115.5

April 2011

145.7 118.1

May 2011

148.8 118.8

June 2011

159.1 123.0

July 2011

162.2 125.4

August 2011

166.0 131.5

September 2011

157.1 122.7

October 2011

143.1 103.3

November 2011

139.6 100.8

December 2011

142.0 97.2

January 2012

136.2 100.1

February 2012

138.8 92.3

March 2012

130.3 94.0

April 2012

129.3 93.4

May 2012

131.5 102.9

June 2012

135.5 107.3

July 2012

147.1 106.1

August 2012

151.2 99.9

September 2012

142.2 100.3

October 2012

138.7 98.6

November 2012

140.8 99.2

December 2012

139.9 102.5

January 2013

141.1 101.7

February 2013

143.5 101.0

March 2013

144.0 99.3

April 2013

144.8 103.3

May 2013

147.3 113.6

June 2013

148.7 102.4

July 2013

154.6 112.9

August 2013

153.9 98.3

September 2013

151.6 112.5

October 2013

145.9 98.7

November 2013

143.2 104.9

December 2013

149.6 155.5

January 2014

159.6 199.8

February 2014

181.9 183.7

March 2014

166.4 151.7

April 2014

156.2 152.9

May 2014

154.4 111.7

June 2014

159.4 105.2

July 2014

161.8 107.5

August 2014

161.8 101.3

September 2014

159.8 104.6

October 2014

152.0 99.3

November 2014

151.4 101.0

December 2014

150.3 106.8

January 2015

144.8 135.7

February 2015

140.2 107.8

March 2015

143.1 160.9

April 2015

138.4 107.9

May 2015

137.5 102.7

June 2015

143.8 101.6

July 2015

150.9 111.9

August 2015

153.0 101.3

September 2015

149.8 95.8

October 2015

139.6 90.2

November 2015

134.8 89.1

December 2015

133.8 86.5

January 2016

131.9 88.4

February 2016

130.8 87.0

March 2016

123.9 85.5

April 2016

128.9 82.8

May 2016

128.1 85.9

June 2016

134.8 95.3

July 2016

140.5 93.9

August 2016

146.0 98.2

September 2016

142.7 94.0

October 2016

138.4 87.5

November 2016

132.2 86.1

December 2016

138.6 94.9

January 2017

142.0 100.3

February 2017

136.3 94.4

March 2017

140.2 88.9

April 2017

141.3 91.4

May 2017

134.4 90.2

June 2017

141.8 90.1

July 2017

144.1 98.9

August 2017

144.6 100.0

September 2017

147.0 99.1

October 2017

141.3 94.6

November 2017

138.9 97.7

December 2017

137.8 96.8

January 2018

153.7 137.6

February 2018

138.2 109.0

March 2018

134.4 102.5

April 2018

137.1 109.2

May 2018

136.6 99.0

June 2018

146.1 104.6

July 2018

151.8 118.0

August 2018

169.6 143.1

September 2018

148.6 111.6

October 2018

150.5 114.5

November 2018

150.6 121.2

December 2018

158.1 139.4

January 2019

143.1 113.8

February 2019

150.6 138.9

March 2019

161.2 132.4

April 2019

143.3 109.0

May 2019

137.9 108.7

June 2019

148.2 110.8

July 2019

152.0 109.6

August 2019

154.9 170.5

September 2019

151.7 172.0

October 2019

149.8 118.2

November 2019

152.0 115.3

December 2019

144.1 106.5

Note: Data is not seasonally adjusted.

Source: U.S. Bureau of Labor Statistics.

Price development by regional fuel mix

The electric power system remains regionalized. State-based utilities generally approve rates, while most power consumed in a region comes from the generating capacity in that region. Using Energy Information Administration (EIA) data and aggregating states into their census regions, the PPI program can compare price trends across the regions, by fuel mix.10 The figures in this section compare average price changes in residential electric power between regions with high or low capacity shares of the specific fuel types: coal, natural gas, renewables (excluding hydropower), and total renewables (including hydropower).11 In contrast, within the main PPI structure for NAICS 221122, regional PPIs for residential electric power are combined to create and aggregate indexes for overall residential electric power.

Exhibit 1 categorizes each Census region’s sources of electric power by type of power source, assigning a descriptor of either low or high. Regions are grouped as low or high based on whether they are in the upper or lower half of all regions for share of each fuel type, using the average share from 2004 to 2019.

Exhibit 1. Use of electric power generation sources, by region, 2004–19
Region Coal Natural gas Total renewables Renewables (excluding hydropower)

New England

Low High High High

Middle Atlantic

Low High High Low

South Atlantic

High High Low Low

East North Central

High Low Low Low

East South Central

High Low Low Low

West North Central

High Low High High

West South Central

Low High Low High

Mountain

High High High High

Pacific

Low Low High High

Source: U.S. Energy Information Administration.

As shown in chart 5, regions with high and low shares of capacity in coal plants have seen prices diverge significantly since 2010. Prices have risen at a faster rate and remained at higher levels in regions with higher shares of coal. This is not surprising given the 93.4 percent increase in the price for prepared bituminous coal from 2004 to 2019.12 Most of that increase happened between 2004 and 2010, when prices rose 79.8 percent.

View Chart Data

Chart 5. Producer Price Index (PPI) for residential electric power based on degree of coal utilization by region, January 2004–December 2019
Date High coal utilization Low coal utilization

January 2004

100.0 100.0

February 2004

100.1 99.8

March 2004

100.2 100.1

April 2004

100.3 100.8

May 2004

102.0 101.2

June 2004

106.0 99.1

July 2004

107.6 99.3

August 2004

107.7 100.1

September 2004

107.8 100.3

October 2004

103.5 103.9

November 2004

101.4 102.3

December 2004

101.5 102.6

January 2005

102.5 102.8

February 2005

102.7 103.1

March 2005

102.8 103.7

April 2005

103.1 103.2

May 2005

104.1 103.5

June 2005

108.4 105.0

July 2005

110.4 105.2

August 2005

111.0 105.4

September 2005

110.8 106.0

October 2005

108.4 109.8

November 2005

107.8 109.7

December 2005

108.3 109.9

January 2006

111.3 112.3

February 2006

111.8 112.7

March 2006

110.9 112.2

April 2006

111.4 112.6

May 2006

112.0 113.4

June 2006

115.8 113.1

July 2006

117.0 113.3

August 2006

117.8 114.2

September 2006

118.1 114.7

October 2006

113.9 113.5

November 2006

111.9 110.8

December 2006

112.1 110.8

January 2007

114.1 112.0

February 2007

115.2 112.1

March 2007

114.6 112.1

April 2007

115.7 111.6

May 2007

117.1 112.5

June 2007

122.1 116.2

July 2007

124.1 115.8

August 2007

123.7 115.7

September 2007

123.3 116.6

October 2007

120.1 113.7

November 2007

118.3 113.0

December 2007

119.0 113.5

January 2008

121.0 114.2

February 2008

121.5 112.5

March 2008

121.6 114.1

April 2008

122.3 115.7

May 2008

123.4 117.3

June 2008

130.4 118.9

July 2008

132.9 121.1

August 2008

132.8 121.0

September 2008

132.7 120.8

October 2008

129.7 119.3

November 2008

129.4 117.0

December 2008

129.7 117.2

January 2009

132.4 117.7

February 2009

132.7 118.5

March 2009

132.2 117.0

April 2009

131.6 116.9

May 2009

131.9 118.0

June 2009

137.1 116.9

July 2009

138.2 117.8

August 2009

138.4 116.6

September 2009

138.5 116.6

October 2009

131.7 117.6

November 2009

131.3 116.4

December 2009

131.0 117.2

January 2010

131.2 115.6

February 2010

131.4 116.9

March 2010

131.9 119.5

April 2010

132.8 120.7

May 2010

133.2 121.8

June 2010

142.8 122.5

July 2010

145.0 122.5

August 2010

144.7 122.9

September 2010

145.0 123.1

October 2010

136.3 122.9

November 2010

135.2 119.6

December 2010

135.3 120.8

January 2011

136.4 122.6

February 2011

136.5 123.7

March 2011

136.8 124.2

April 2011

136.7 124.3

May 2011

137.7 126.3

June 2011

142.4 127.4

July 2011

144.5 126.6

August 2011

144.5 127.1

September 2011

144.2 126.5

October 2011

139.4 126.3

November 2011

138.2 124.3

December 2011

139.2 124.5

January 2012

139.0 123.5

February 2012

139.3 123.7

March 2012

139.2 123.1

April 2012

139.8 122.8

May 2012

141.9 123.3

June 2012

146.4 122.4

July 2012

147.2 123.2

August 2012

146.7 123.9

September 2012

146.8 125.1

October 2012

141.4 124.3

November 2012

141.3 123.3

December 2012

141.8 124.7

January 2013

142.0 127.4

February 2013

142.0 126.6

March 2013

142.1 126.6

April 2013

142.1 126.6

May 2013

143.2 127.9

June 2013

148.4 128.7

July 2013

149.9 129.1

August 2013

149.3 129.2

September 2013

148.9 130.1

October 2013

144.8 128.5

November 2013

143.8 127.5

December 2013

143.6 129.0

January 2014

145.7 129.1

February 2014

145.4 127.3

March 2014

145.7 131.7

April 2014

145.9 132.7

May 2014

146.4 133.9

June 2014

153.4 135.2

July 2014

154.3 135.6

August 2014

154.5 136.1

September 2014

155.8 134.6

October 2014

149.6 135.2

November 2014

148.2 132.7

December 2014

148.7 133.0

January 2015

150.3 135.4

February 2015

150.0 134.6

March 2015

150.0 133.5

April 2015

149.6 133.3

May 2015

150.0 133.7

June 2015

157.2 135.1

July 2015

158.9 135.2

August 2015

158.7 134.9

September 2015

157.5 135.1

October 2015

150.9 134.0

November 2015

149.3 132.8

December 2015

149.8 132.4

January 2016

149.3 133.2

February 2016

148.9 131.7

March 2016

148.9 135.5

April 2016

148.2 133.0

May 2016

148.8 134.2

June 2016

156.0 134.9

July 2016

157.3 135.9

August 2016

157.8 136.8

September 2016

157.6 137.8

October 2016

150.3 136.7

November 2016

148.9 136.7

December 2016

148.4 137.5

January 2017

150.9 136.7

February 2017

151.9 139.2

March 2017

152.6 140.1

April 2017

153.5 137.2

May 2017

153.9 139.8

June 2017

160.9 139.9

July 2017

163.0 140.0

August 2017

162.5 140.4

September 2017

161.3 140.6

October 2017

154.0 140.8

November 2017

153.4 139.8

December 2017

153.5 139.0

January 2018

154.8 141.9

February 2018

154.6 142.8

March 2018

154.7 142.1

April 2018

154.1 140.3

May 2018

154.2 142.9

June 2018

162.3 145.1

July 2018

162.2 144.9

August 2018

161.2 145.0

September 2018

160.9 143.1

October 2018

152.9 144.0

November 2018

152.6 142.1

December 2018

152.9 141.2

January 2019

154.2 143.7

February 2019

153.7 143.6

March 2019

153.3 146.2

April 2019

153.5 145.5

May 2019

154.0 146.8

June 2019

159.4 152.9

July 2019

163.1 152.7

August 2019

162.8 152.8

September 2019

162.5 150.6

October 2019

155.0 148.0

November 2019

151.7 146.9

December 2019

151.5 147.3

Note: Low coal utilization regions are New England, Middle Atlantic, West South Central, and Pacific.
High coal utilization regions are South Atlantic, East North Central, East South Central, West North Central, and Mountain.

Source: U.S. Bureau of Labor Statistics.

Chart 6 compares the high and low groups by share of natural gas utilization for electric power generation, and indicates that regions with high penetration of natural gas saw prices rise at a slower rate since 2008. Regions with a low share of natural gas saw steeper price increases and exhibited sharper seasonal differences. This coincides with the overall downward trend in prices for natural gas, and its rise as an input to generation as compared to nuclear power and coal.13

View Chart Data

Chart 6. Producer Price Index (PPI) for residential electric power based on degree of natural gas utilization, January 2004–December 2019
Date High natural gas utilization Low natural gas utilization

January 2004

100.0 100.0

February 2004

99.9 100.2

March 2004

100.1 100.1

April 2004

100.3 100.8

May 2004

101.6 101.7

June 2004

104.8 100.6

July 2004

105.7 101.8

August 2004

106.1 102.0

September 2004

106.3 102.0

October 2004

104.2 102.8

November 2004

101.4 102.2

December 2004

101.8 102.2

January 2005

102.5 102.9

February 2005

102.7 103.2

March 2005

103.2 103.1

April 2005

103.0 103.4

May 2005

104.0 103.5

June 2005

109.5 103.1

July 2005

110.4 104.9

August 2005

110.7 105.5

September 2005

111.2 105.3

October 2005

111.2 105.8

November 2005

110.9 105.2

December 2005

111.4 105.3

January 2006

113.7 108.9

February 2006

113.7 110.0

March 2006

112.7 109.5

April 2006

112.9 110.5

May 2006

113.6 111.1

June 2006

116.5 112.0

July 2006

117.0 113.2

August 2006

117.3 114.8

September 2006

117.6 115.1

October 2006

116.0 110.3

November 2006

113.7 108.1

December 2006

113.4 108.7

January 2007

114.0 111.9

February 2007

114.2 113.4

March 2007

114.5 112.0

April 2007

114.2 113.6

May 2007

115.0 115.5

June 2007

119.1 120.3

July 2007

119.8 121.6

August 2007

119.9 121.0

September 2007

120.3 120.7

October 2007

117.6 117.1

November 2007

116.4 115.6

December 2007

116.9 116.3

January 2008

118.0 118.2

February 2008

116.9 118.9

March 2008

118.1 118.9

April 2008

119.6 119.4

May 2008

120.9 120.6

June 2008

123.7 128.2

July 2008

126.5 130.0

August 2008

126.5 129.7

September 2008

126.4 129.6

October 2008

124.6 126.4

November 2008

122.7 126.4

December 2008

123.1 126.3

January 2009

125.0 127.9

February 2009

125.5 128.4

March 2009

124.2 128.0

April 2009

123.2 128.7

May 2009

123.8 129.3

June 2009

124.3 134.8

July 2009

125.6 135.4

August 2009

125.1 135.3

September 2009

124.8 135.9

October 2009

124.1 128.3

November 2009

123.0 127.9

December 2009

123.4 127.7

January 2010

122.2 128.3

February 2010

122.7 129.1

March 2010

124.4 129.9

April 2010

125.9 130.3

May 2010

126.4 131.4

June 2010

128.9 142.1

July 2010

129.5 144.5

August 2010

129.9 143.8

September 2010

129.7 144.7

October 2010

128.2 134.3

November 2010

125.0 133.9

December 2010

125.6 134.6

January 2011

127.2 135.5

February 2011

127.9 135.7

March 2011

128.3 136.2

April 2011

128.4 136.0

May 2011

130.4 136.5

June 2011

133.1 140.4

July 2011

133.4 142.2

August 2011

133.5 142.5

September 2011

133.2 142.1

October 2011

131.5 137.2

November 2011

128.3 138.3

December 2011

128.6 139.3

January 2012

127.9 139.2

February 2012

128.6 138.8

March 2012

128.1 138.8

April 2012

127.8 139.8

May 2012

129.5 140.6

June 2012

130.9 144.1

July 2012

131.4 145.4

August 2012

131.4 145.6

September 2012

131.7 146.3

October 2012

129.1 141.7

November 2012

127.9 142.3

December 2012

129.3 142.4

January 2013

129.9 144.6

February 2013

129.4 144.5

March 2013

129.6 144.4

April 2013

129.5 144.5

May 2013

131.2 144.9

June 2013

133.9 149.3

July 2013

135.2 149.8

August 2013

135.6 148.5

September 2013

135.8 148.7

October 2013

133.0 145.3

November 2013

131.1 145.5

December 2013

131.6 145.9

January 2014

132.6 147.8

February 2014

131.2 147.5

March 2014

134.2 148.1

April 2014

134.5 148.9

May 2014

136.4 148.2

June 2014

140.4 153.5

July 2014

141.4 153.7

August 2014

141.2 155.1

September 2014

139.9 157.1

October 2014

137.9 152.0

November 2014

135.1 151.4

December 2014

136.0 151.0

January 2015

137.5 153.6

February 2015

137.3 152.7

March 2015

136.6 152.6

April 2015

135.6 153.2

May 2015

136.3 153.2

June 2015

140.2 159.2

July 2015

140.6 161.1

August 2015

140.4 161.0

September 2015

140.3 159.5

October 2015

136.8 154.0

November 2015

134.6 153.9

December 2015

134.4 154.4

January 2016

133.0 156.6

February 2016

132.0 156.0

March 2016

134.5 156.2

April 2016

132.2 155.9

May 2016

134.0 155.5

June 2016

136.7 162.4

July 2016

138.2 163.2

August 2016

138.9 163.8

September 2016

139.2 164.2

October 2016

135.9 157.5

November 2016

134.1 158.0

December 2016

134.3 157.9

January 2017

134.7 160.1

February 2017

137.0 160.6

March 2017

137.1 162.6

April 2017

135.7 162.9

May 2017

138.3 162.2

June 2017

141.9 167.1

July 2017

142.3 169.7

August 2017

142.7 168.7

September 2017

142.3 167.9

October 2017

139.0 162.4

November 2017

138.0 161.9

December 2017

137.2 162.6

January 2018

138.5 165.4

February 2018

139.3 165.0

March 2018

138.1 166.1

April 2018

136.7 165.5

May 2018

139.0 164.9

June 2018

143.5 172.2

July 2018

143.5 171.8

August 2018

143.1 171.0

September 2018

143.0 168.9

October 2018

139.2 163.9

November 2018

137.3 164.4

December 2018

136.8 164.7

January 2019

138.4 166.7

February 2019

138.3 166.0

March 2019

139.2 166.8

April 2019

138.7 167.2

May 2019

139.6 167.9

June 2019

143.1 176.8

July 2019

145.4 178.5

August 2019

145.9 177.4

September 2019

144.8 176.2

October 2019

142.2 166.8

November 2019

138.0 167.0

December 2019

137.9 167.3

Source: U.S. Bureau of Labor Statistics.

Reflected in chart 7, regions with higher penetration of renewable fuel (excluding hydroelectric power) saw slower price increases from 2004 to 2019. Electric power prices in regions with high shares of renewable fuel (excluding hydropower) experienced slower price growth and lower overall price levels from 2005 to 2015. Since 2015, the gap has closed and all regions have seen more similar price levels. For total renewable fuel, including hydropower, electric power prices in regions with high consumption of total renewable fuel did not rise as much from 2005 to 2019. (See chart 8.)

View Chart Data

Chart 7. Producer Price Index (PPI) for residential electric power based on degree of non-hydroelectric renewable utilization, by region, January 2004–December 2019
Date High renewables utilization Low renewables utilization

January 2004

100.0 100.0

February 2004

99.9 100.1

March 2004

100.2 100.0

April 2004

101.1 100.1

May 2004

103.4 100.3

June 2004

103.1 103.2

July 2004

103.8 104.3

August 2004

104.7 104.2

September 2004

104.8 104.4

October 2004

106.8 101.3

November 2004

103.0 100.8

December 2004

103.3 100.9

January 2005

103.1 102.3

February 2005

103.6 102.3

March 2005

103.9 102.6

April 2005

103.8 102.7

May 2005

105.1 102.8

June 2005

107.6 106.5

July 2005

108.3 108.1

August 2005

108.7 108.6

September 2005

108.9 108.7

October 2005

110.6 107.8

November 2005

110.6 107.1

December 2005

111.1 107.4

January 2006

113.3 110.5

February 2006

113.8 111.1

March 2006

112.5 110.7

April 2006

112.6 111.4

May 2006

113.8 111.6

June 2006

115.1 114.4

July 2006

115.3 115.5

August 2006

116.5 116.1

September 2006

117.1 116.3

October 2006

114.3 113.2

November 2006

111.0 111.7

December 2006

111.0 111.9

January 2007

111.4 114.5

February 2007

111.4 115.8

March 2007

111.4 115.1

April 2007

111.4 115.9

May 2007

112.6 117.1

June 2007

117.4 121.2

July 2007

118.0 122.5

August 2007

117.2 122.6

September 2007

117.6 122.6

October 2007

114.6 119.5

November 2007

113.4 118.2

December 2007

114.3 118.5

January 2008

114.8 120.5

February 2008

113.2 121.1

March 2008

114.9 121.0

April 2008

116.6 121.7

May 2008

119.2 122.0

June 2008

123.1 127.3

July 2008

126.6 128.9

August 2008

126.0 129.2

September 2008

125.7 129.1

October 2008

122.7 127.3

November 2008

120.1 127.2

December 2008

120.0 127.7

January 2009

120.5 130.5

February 2009

121.3 130.7

March 2009

119.9 130.1

April 2009

119.6 129.8

May 2009

120.5 130.1

June 2009

122.0 133.5

July 2009

122.9 134.6

August 2009

122.2 134.4

September 2009

121.5 135.0

October 2009

119.0 130.9

November 2009

118.0 130.3

December 2009

118.6 130.1

January 2010

119.1 128.8

February 2010

120.1 129.2

March 2010

122.6 129.6

April 2010

123.8 130.6

May 2010

125.1 130.8

June 2010

128.5 138.5

July 2010

129.0 140.3

August 2010

129.7 139.8

September 2010

129.8 140.2

October 2010

126.2 134.0

November 2010

122.9 132.9

December 2010

124.4 132.8

January 2011

125.0 134.8

February 2011

126.6 134.4

March 2011

127.9 134.2

April 2011

128.2 133.9

May 2011

130.1 134.9

June 2011

133.3 138.0

July 2011

133.9 139.2

August 2011

134.6 139.0

September 2011

133.6 139.1

October 2011

130.7 136.2

November 2011

128.1 135.5

December 2011

128.7 136.2

January 2012

128.0 135.7

February 2012

127.8 136.4

March 2012

127.9 135.8

April 2012

128.1 136.0

May 2012

129.9 137.0

June 2012

131.4 139.9

July 2012

132.2 140.6

August 2012

132.8 140.2

September 2012

132.9 141.1

October 2012

130.1 137.2

November 2012

129.3 137.0

December 2012

129.6 138.4

January 2013

132.7 138.1

February 2013

132.8 137.5

March 2013

132.4 137.9

April 2013

132.1 138.1

May 2013

134.8 138.2

June 2013

139.0 140.8

July 2013

139.7 142.1

August 2013

139.9 141.5

September 2013

139.9 141.8

October 2013

136.1 139.3

November 2013

134.7 138.5

December 2013

135.3 139.0

January 2014

135.9 140.8

February 2014

136.5 138.7

March 2014

137.0 141.8

April 2014

139.0 141.3

May 2014

139.9 142.1

June 2014

145.6 145.7

July 2014

146.3 146.4

August 2014

147.3 146.3

September 2014

146.2 147.3

October 2014

142.3 144.4

November 2014

139.1 143.6

December 2014

139.1 144.3

January 2015

141.4 146.0

February 2015

140.9 145.4

March 2015

140.4 145.0

April 2015

140.4 144.4

May 2015

142.6 143.4

June 2015

146.0 149.2

July 2015

146.4 150.7

August 2015

146.6 150.2

September 2015

146.1 149.5

October 2015

142.0 145.0

November 2015

139.2 144.7

December 2015

138.7 145.2

January 2016

140.0 144.4

February 2016

139.2 143.4

March 2016

140.2 145.5

April 2016

139.8 143.2

May 2016

141.6 143.4

June 2016

145.6 148.1

July 2016

146.4 149.6

August 2016

147.5 150.0

September 2016

147.6 150.5

October 2016

143.3 145.5

November 2016

142.2 144.8

December 2016

143.0 144.4

January 2017

141.5 147.4

February 2017

143.5 148.7

March 2017

145.8 148.4

April 2017

143.4 149.0

May 2017

144.6 150.5

June 2017

148.3 154.8

July 2017

148.8 156.6

August 2017

149.1 156.2

September 2017

149.2 155.1

October 2017

146.5 149.8

November 2017

145.1 149.5

December 2017

144.1 149.8

January 2018

146.8 151.2

February 2018

146.8 151.8

March 2018

147.1 151.0

April 2018

146.6 149.6

May 2018

148.9 149.8

June 2018

154.3 155.5

July 2018

154.6 155.1

August 2018

154.5 154.2

September 2018

152.1 154.3

October 2018

149.1 149.2

November 2018

147.4 148.8

December 2018

147.2 148.6

January 2019

149.1 150.3

February 2019

148.5 150.1

March 2019

151.2 149.6

April 2019

151.1 149.5

May 2019

152.2 150.1

June 2019

161.2 153.2

July 2019

161.7 156.4

August 2019

161.2 156.6

September 2019

158.8 156.4

October 2019

153.5 151.0

November 2019

150.7 148.9

December 2019

150.4 149.2

Source: U.S. Bureau of Labor Statistics.

View Chart Data

Chart 8. Producer Price Index (PPI) for residential electric power based on degree of total renewable utilization, by region, January 2004–December2019
Date High renewables and hydro utilization Low renewables and hydro utilization

January 2004

100.0 100.0

February 2004

100.1 100.0

March 2004

100.2 100.1

April 2004

101.1 100.1

May 2004

103.3 100.4

June 2004

101.2 104.5

July 2004

101.8 105.8

August 2004

102.1 106.2

September 2004

102.2 106.3

October 2004

104.1 103.4

November 2004

101.5 102.0

December 2004

101.5 102.3

January 2005

102.0 103.0

February 2005

102.2 103.4

March 2005

102.5 103.6

April 2005

102.6 103.6

May 2005

103.5 104.1

June 2005

103.4 109.6

July 2005

104.1 111.2

August 2005

104.4 111.7

September 2005

104.0 112.3

October 2005

105.9 111.3

November 2005

105.7 110.8

December 2005

106.1 111.1

January 2006

107.6 114.7

February 2006

107.9 115.4

March 2006

107.1 114.6

April 2006

107.3 115.3

May 2006

107.9 116.0

June 2006

107.9 119.7

July 2006

108.3 120.7

August 2006

109.7 121.1

September 2006

109.7 121.7

October 2006

106.6 118.9

November 2006

105.2 115.9

December 2006

106.1 115.5

January 2007

106.9 117.8

February 2007

106.9 119.0

March 2007

107.0 118.3

April 2007

107.8 118.5

May 2007

108.7 119.9

June 2007

113.9 123.8

July 2007

115.3 124.4

August 2007

114.7 124.4

September 2007

114.2 125.0

October 2007

110.0 122.8

November 2007

109.3 121.1

December 2007

109.8 121.7

January 2008

110.9 123.3

February 2008

110.9 122.6

March 2008

110.9 123.9

April 2008

110.8 125.9

May 2008

112.4 126.9

June 2008

115.1 133.1

July 2008

115.4 137.0

August 2008

115.1 137.1

September 2008

114.9 137.0

October 2008

112.5 134.8

November 2008

112.0 133.0

December 2008

111.9 133.6

January 2009

113.6 135.4

February 2009

113.8 136.1

March 2009

113.7 134.5

April 2009

114.1 133.7

May 2009

114.7 134.3

June 2009

116.8 137.1

July 2009

117.6 138.3

August 2009

118.3 137.2

September 2009

117.9 137.5

October 2009

115.7 133.1

November 2009

115.1 132.2

December 2009

115.3 132.3

January 2010

115.7 131.1

February 2010

116.7 131.5

March 2010

118.0 132.9

April 2010

118.3 134.5

May 2010

119.0 135.2

June 2010

121.5 143.5

July 2010

123.1 144.6

August 2010

123.2 144.5

September 2010

122.6 145.3

October 2010

119.7 138.7

November 2010

119.0 135.6

December 2010

119.4 136.3

January 2011

121.4 137.3

February 2011

121.5 138.1

March 2011

121.0 139.1

April 2011

121.7 138.6

May 2011

123.8 139.5

June 2011

126.2 143.1

July 2011

126.6 144.5

August 2011

126.8 144.7

September 2011

126.8 144.0

October 2011

124.4 140.7

November 2011

123.0 139.1

December 2011

123.8 139.6

January 2012

123.3 139.1

February 2012

123.6 139.4

March 2012

123.2 139.1

April 2012

123.1 139.6

May 2012

124.4 141.0

June 2012

127.1 142.9

July 2012

127.1 144.3

August 2012

127.7 143.9

September 2012

128.4 144.3

October 2012

124.7 141.1

November 2012

124.3 140.5

December 2012

125.5 141.2

January 2013

127.7 141.7

February 2013

127.3 141.5

March 2013

127.6 141.3

April 2013

127.7 141.2

May 2013

128.6 142.7

June 2013

131.9 146.0

July 2013

132.4 147.4

August 2013

132.3 147.0

September 2013

133.2 146.7

October 2013

128.6 144.7

November 2013

128.3 143.2

December 2013

129.4 143.2

January 2014

130.4 144.8

February 2014

128.2 144.7

March 2014

131.8 145.6

April 2014

131.8 146.5

May 2014

133.2 146.9

June 2014

136.0 152.8

July 2014

135.9 154.0

August 2014

136.7 154.1

September 2014

136.0 154.7

October 2014

133.4 151.0

November 2014

132.8 148.1

December 2014

132.2 149.2

January 2015

134.5 150.9

February 2015

134.0 150.4

March 2015

134.0 149.7

April 2015

134.3 148.8

May 2015

133.7 150.0

June 2015

138.4 154.8

July 2015

138.2 156.6

August 2015

137.5 156.8

September 2015

137.7 155.6

October 2015

134.8 150.3

November 2015

134.7 147.9

December 2015

135.4 147.5

January 2016

136.7 146.7

February 2016

135.4 146.1

March 2016

138.5 146.6

April 2016

136.5 145.5

May 2016

137.2 146.6

June 2016

140.8 151.6

July 2016

140.9 153.6

August 2016

141.2 154.5

September 2016

141.5 154.9

October 2016

138.1 149.3

November 2016

138.6 147.4

December 2016

138.7 147.5

January 2017

139.2 149.0

February 2017

140.5 150.9

March 2017

140.3 152.4

April 2017

140.2 151.3

May 2017

143.0 151.6

June 2017

144.9 157.2

July 2017

144.8 159.4

August 2017

145.5 158.8

September 2017

145.5 157.7

October 2017

143.0 152.4

November 2017

142.0 151.7

December 2017

141.7 151.5

January 2018

144.5 152.8

February 2018

145.5 152.6

March 2018

145.2 152.4

April 2018

144.0 151.4

May 2018

145.3 152.4

June 2018

151.2 157.8

July 2018

150.8 157.9

August 2018

150.8 156.9

September 2018

149.5 156.2

October 2018

146.9 150.7

November 2018

145.3 150.3

December 2018

144.4 150.6

January 2019

146.7 152.0

February 2019

145.8 152.1

March 2019

147.0 152.7

April 2019

146.6 152.8

May 2019

148.0 153.1

June 2019

154.7 158.1

July 2019

154.4 161.8

August 2019

154.6 161.4

September 2019

154.6 159.5

October 2019

149.0 154.3

November 2019

147.5 151.3

December 2019

147.1 151.6

Source: U.S. Bureau of Labor Statistics.

It is worth noting that the regions defined as high renewable fuel areas also are areas with substantial populations and high demand for electric power. Intermittency and location-specific availability of renewable fuel for electric power generation means that as the share of generating capacity from sources such as solar and wind rise, the degree of price volatility more heavily depends on the ability of transmission systems to cope with swings in availability. Given that marginal producers determine prices in deregulated energy auctions, a grid ill-prepared for a sudden drop in renewable fuel power generating capacity could see generators with the highest fuel costs (e.g., peaking oil generators) driving price changes. Prices for residential electric power in regions with high utilization of renewable power depend on non-renewable power-generating capacity to a higher degree than do regions with low usage of renewables fuel. The greater price stability linked to hydropower generation, and the smaller spikes during peak demand seasons, help demonstrate how intermittency can combine with existing grid characteristics to push prices higher in periods of high demand and low excess capacity.

Conclusion

In general, prices received by the electric power generation industry have seen only modest increases since the PPI for this industry was introduced in late 2003. Price increases for power generation have moderated in large part due to increasing competition, including growth in smaller-scale independent power producers that use more natural gas and renewable fuel, rather than coal, to generate electricity. The wholesale electricity market has benefited from low natural gas prices, as well as, falling capital costs for renewable energy from wind and solar sources (which have zero fuel cost and often only modest operating and maintenance costs). Over the same period, coal prices surged 93.4 percent from 2004 to 2019, while wholesale electricity prices increased 39.2 percent and retail electricity prices advanced 49.4 percent. Most of the increase in wholesale electricity prices occurred from 2004 to 2010, when coal was still the dominant fuel in the U.S. electricity sector.

Wholesale and retail power prices have been buffered from the effect of higher prices for coal by fuel-switching to natural gas and renewable fuel. Identifying the different price trends for residential electric power by regional fuel mix shows broad differences in how price trends by fuel source have varied between 2004 and 2019. Regions with higher use of natural gas and renewable fuel for electric power generation, in particular hydroelectric power, have seen prices rise more slowly than prices in regions that have predominantly used coal. Although it is not possible to attribute the differences in the retail price development solely to fuel mix, the significant role that capacity investment and fuel costs play in determining distribution rates suggests that at least part of the variation between these regions is explained by capacity shifts in the industry.

This Beyond the Numbers article was prepared by William B. McClain, an economist in the Office of Prices and Living Conditions, U.S. Bureau of Labor Statistics. Email: mcclain.william@bls.gov. Telephone: (202) 691-7893.

Information in this article will be made available upon request to individuals with sensory impairments. Voice phone: (202) 691-5200. Federal Relay Service: 1-800-877-8339. This article is in the public domain and may be reproduced without permission.

Notes

1 “U.S. coal consumption continues to decline across all sectors,” Today in Energy (U.S. Energy Information Administration, June 2020), https://www.eia.gov/todayinenergy/detail.php?id=44115; “U.S. coal-fired electricity generation in 2019 falls to 42-year low,” Today in Energy (U.S. Energy Information Administration, May 2020), https://www.eia.gov/todayinenergy/detail.php?id=43675; and Fred Pearce, “As Investors and Insurers Back Away, the Economics of Coal Turn Toxic,” Yale Environment 360 (March 10, 2020), https://e360.yale.edu/features/as-investors-and-insurers-back-away-the-economics-of-coal-turn-toxic.

2 For more information about the structure and introduction of the PPI for NAICS 221110 (Electric power generation) and NAICS 221121 (Electric bulk power transmission and control), see “New Producer Price Indexes for Electric Power Generation, NAICS 221110, and Electric Bulk Power Transmission and Control, NAICS 221121” (U.S. Bureau of Labor Statistics, October 2005), https://www.bls.gov/ppi/ppipower.htm.

3 The United States Census Bureau designates nine census regions: New England, Middle Atlantic, South Atlantic, East North Central, East South Central, West North Central, West South Central, Mountain, and Pacific. For a map and more information, see “Census Regions and Divisions of the United States” (U.S. Census Bureau), https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf.

4 For more information on U.S. electricity markets, see “U.S. Electricity Grid & Markets” (U.S. Environmental Protection Agency), https://www.epa.gov/greenpower/us-electricity-grid-markets; and “Electric Power Markets,” (Federal Energy Regulatory Commission, October 2020), https://www.ferc.gov/industries-data/market-assessments/overview/electric-power-markets.

5 The two primary energy auctions are the day-ahead futures market that ensures enough capacity is available to meet expected future demand and a real-time market that balances supply to address deviations of demand from the day-ahead schedule. A large quantity of energy in deregulated markets is sold on the day-ahead market. For more detailed information on the structure of wholesale auctions, see “Lesson 8: Day-ahead and Real-time Energy Markets” from “EBF 483: introduction to electricity markets,” Penn State College of Earth and Mineral Sciences, https://www.e-education.psu.edu/ebf483/node/527.

6 The PPI program also publishes a commodity index for electric power (PPI 054) using the same microdata employed to calculate the PPI for NAICS 221122, electric power distribution. This commodity index is available unadjusted (WPU054) and seasonally adjusted (WPS054). The seasonally adjusted version of this index accounts for identifiable, historical seasonal variations in the index. Long-term trends (12-month and annual rates of change) are comparable between the not-seasonally-adjusted and seasonally-adjusted commodity indexes, as well as to the industry index.

7 Distribution prices are the result of complicated regulatory proceedings that require a full accounting of a utility’s rate base and expenses. A utility’s rate base includes the full set of assets that will earn a return, meaning changes in rate bases will reflect capital investment and plant retirement. Inclusion of operating and maintenance costs results in a pass-through of general inflation, as well as fuel- and plant-specific inflation. In addition to long-term trend components that drive prices up, short-term fluctuations in fuel costs will also pass through to distribution prices.

8 Stephen York, “Drilling deep into PPI indexes to understand regional variations in natural gas price movements,” Beyond the Numbers: Prices and Spending, vol. 7, no 1 (U.S. Bureau of Labor Statistics, February 2018), https://www.bls.gov/opub/btn/volume-7/drilling-deep-into-ppi-indexes-to-understand-regional-variations-in-natural-gas-price-movements.htm?view_full.

9 For more information, see tables 3.2 and 3.3 from the U.S. Energy Information Administration, Electricity: Electric Power Annual, https://www.eia.gov/electricity/annual/.

10 The Energy Information Administration collects detailed generator data at the state-level on Form EIA-860 and makes these data publicly available; see “Form EIA-860 detailed data with previous form data (EIA-860A/860B)” (U.S. Energy Information Administration, September 2020), https://www.eia.gov/electricity/data/eia860/.

11 Residential prices are used because the PPI disaggregates by region and end-user at the same time. Residential end-users typically account for a plurality of electricity sales. From 2008 to 2018, they were responsible for 37.6 percent of total sales of electricity in the United States, compared with 35.9 percent for commercial users and 26.3 percent for industrial users. (See table 2.5 in the EIA’s Electric Power Annual.) Residential consumers had the largest share of sales in each year in that time period. In general, the price trends for residential consumers presented in this article are similar for commercial and industrial end-users. One notable difference is that commercial and industrial users, due to higher average usage levels and lighter regulation, often display greater month-over-month variability in rates.

12 To obtain PPI data for prepared bituminous coal and lignite, not seasonally adjusted, see https://data.bls.gov/timeseries/WPU051209?from_year=2001.

13 To obtain PPI data for natural gas, not seasonally adjusted, see https://data.bls.gov/timeseries/WPU0531?from_year=2001.

Download PDF

Publish Date: Tuesday, May 4, 2021

Suggested citation:

William B. McClain,   “Trends in electricity prices during the transition away from coal,” Beyond the Numbers, vol. 10, no. 10 (U.S. Bureau of Labor Statistics, May 2021), https://www.bls.gov/opub/btn/volume-10/trends-in-electricity-prices-during-the-transition-away-from-coal.htm (visited June 22, 2021).

Telephone: 1-202-691-5200 Federal Relay Service: 1-800-877-8340 www.bls.gov/OPUB Contact Us

View this page on regular www.bls.gov

Permanently disable mobile site