Keystone Today

The U.S. Energy Information Administration (EIA) released data for its short-term energy outlook last week, bringing grim news to Americans as colder months approach. Limited natural gas production combined with a higher demand for natural gas has left no choice but for prices to rise. The data reveals significantly higher wholesale electricity prices are expected this winter in all supply regions analyzed. In Pennsylvania, residents can expect to spend over 60% more on electricity this year than they did last year.

The EIA reports that states in the mid-Atlantic region, including Pennsylvania, are expected to see average electricity prices that are 62% higher this winter when compared to last winter.

"We expect higher wholesale #electricity prices this winter in every region of the country. Our forecast for wholesale winter electricity prices ranges from 31% higher in the Southwest to more than 60% higher in the mid-Atlantic and Central regions. #STEO," the EIA wrote in a Dec. 6 Twitter post.

There are 11 Short-Term Energy Outlook (STEO) electricity supply regions that the EIA analyzes on a monthly basis. This month's data shows an average 50.6% increase for average on-peak wholesale electricity prices across the United States.

According to EIA data, mid-Atlantic and central region states that rely on the Pennsylvania, New Jersey and Maryland (PJM) and the Southwest Power Pool (SPP) electricity supply chains will see the largest price increases during this year's winter months, when compared to last. The 2022-2023 forecast for electricity prices in both regions during the months of December through February are expected to be 62% higher than that of the winter months in 2021-2022.

The EIA states that the New England region, which is expected to experience the highest wholesale prices this winter, is expected to average in excess of $180 per megawatt hour, and could have wholesale electricity price peaks higher than $200/MWh in January. This is more than three times higher than peak rates elsewhere in the country.

Retail electricity prices are also expected to be higher this winter. The EIA forecasts residential electricity prices to average 14.5 cents per kilowatt hour in the core winter months from December through February, which is 6% higher than last winter. Price increases range from almost no change in the West North Central region to 18% in the New England region.

The EIA continues to expect limited natural gas production in the Permian Basin into early 2023, driven by the lack of pipeline capacity to bring associated natural gas production to market. This, along with higher winter natural gas demand, and rising liquid natural gas (LNG) exports are contributing factors to the forecasted higher prices.

EIA data reveals the smallest winter-over-winter price increase will be on the west coast. However, the spike is still significant, as the California ISO electricity supply chain region will experience 33% higher prices when compared to last winter.