Energy Department: Natural Gas Helps Lower Texas Energy Prices
Mon, August 12, 2019
Citing inexpensive natural gas supplies, the U.S. Energy Information Administration (EIA) estimates average wholesale electricity prices to be lower across the country in 2019. Texas is expected to see the largest decline, falling by an estimated 28 percent this year as compared to 2018, EIA reports.
While a number of factors play a role in energy prices nationwide, natural gas is the driving force behind these declines, as a cheap, abundant supply of the fuel is putting more money in the pockets of American consumers. As EIA’s Short-Term Energy Outlook notes:
“Lower costs for natural gas drive EIA’s forecast that annual average wholesale electricity prices will be lower in 2019 than last year in all areas of the United States. The forecast year-over-year declines range from -0.2% in the Southwest Power Pool (SPP) to -28% in the Electric Reliability Council of Texas (ERCOT) market.” (emphasis added)
Coupled with this decline in natural gas prices is increased usage for electricity generation. EIA estimates that the share of total utility-scale electricity generation from natural gas power plants in the United States will grow from 34 percent in 2018 to 37 percent in 2019. Notably, this growth in natural gas use also means lower emissions. EIA data show that CO2 emissions from electricity generation declined 28 percent from 2005 to 2017, with growth in natural gas-powered generation directly attributed with about 63 percent of that overall decline.
While Texas is estimated to see the largest decline, natural gas is also expected to help lower energy prices in other non-producing states. In California, for example, EIA forecasts 2019 prices to be about 22 percent lower than average prices in 2018. This decline “reflects the overall forecast decline in U.S. natural gas fuel costs.”
With Texas seeing record breaking heat this summer, it’s great to have inexpensive natural gas to keep power prices low and your air conditioner running.