Americans can expect to pay more to stay cool this summer thanks to forecasts for above-average temperatures across the country and natural-gas prices that are heading into air-conditioning season 37% higher than last year.
On average, Americans should count on their electricity bills in June, July and August rising 4% from last year, mostly due to more expensive natural gas, according to the Energy Information Administration.
That would bring the nationwide summertime average to $186 a month, up from $180 last year and $148 four years ago, the EIA said.
New England—where a dearth of gas pipelines keeps energy prices among the highest in the country—should see the biggest jump in monthly bills, up 6.7% from last year, to about $200. The Pacific Coast is among the few places where lower bills are expected, down 1% from last summer, to an average of $176.
Summer has become a big second season for natural gas. The most gas gets burned in winter, in furnaces and boilers for heat as well as in power plants. But the amount of gas burned to generate electricity during the summer has surged in recent years, even as renewables have proliferated.
More gas than ever was burned generating electricity last summer, which was one of the hottest on record. Over the course of the year, power plants accounted for 41% of U.S. natural gas consumption, up from 40% the year before, according to the EIA. To keep the lights on during the hottest stretches, more of the less-efficient part-time power plants—known as peakers—are fired up, which boosts gas consumption further.
Natural-gas futures ended Friday at $3.784 per million British thermal units, up 9.8% on the week. Wall Street forecasters generally think they have higher to climb.
Energy trading firm EBW Analytics said it expects prices above $4 in the heat of August, when power demand peaks and liquefied national gas export facilities currently undergoing maintenance are expected to resume full operations.
Morgan Stanley analysts are even more bullish, predicting prices above $5 during the second half of the year.
“Supply is not on track to keep pace with demand growth,” they wrote in a note to clients last week.
Many analysts, traders and producers believe the gas market is at an inflection point. After a two-year glut that depressed prices, the market faces competing demand from mushrooming LNG export terminals and power producers that will lift gas prices.
Add Comment