Posted on 11/21/2008 5:51:58 AM PST by shove_it
An unexpected drop in U.S. electricity consumption has utility companies worried that the trend isn't a byproduct of the economic downturn, and could reflect a permanent shift in consumption that will require sweeping change in their industry.
Numbers are trickling in from several large utilities that show shrinking power use by households and businesses in pockets across the country. Utilities have long counted on sales growth of 1% to 2% annually in the U.S., and they created complex operating and expansion plans to meet the needs of a growing population.
"We're in a period where growth is going to be challenged," says Jim Rogers, chief executive of Duke Energy Corp. in Charlotte, N.C.
The data are early and incomplete, but if the trend persists, it could ripple through companies' earnings and compel major changes in the way utilities run their businesses. Utilities are expected to invest $1.5 trillion to $2 trillion by 2030 to modernize their electric systems and meet future needs, according to an industry-funded study by the Brattle Group. However, if electricity demand is flat or even declining, utilities must either make significant adjustments to their investment plans or run the risk of building too much capacity. That could end up burdening customers and shareholders with needless expenses.
To be sure, electricity use fluctuates with the economy and population trends. But what has executives stumped is that recent shifts appear larger than others seen previously, and they can't easily be explained by weather fluctuations. They have also penetrated the most stable group of consumers -- households. [...]
(Excerpt) Read more at online.wsj.com ...
Old people are dying, the illegal aliens are leaving and Americans have been aborting their posterity for 35 years.
All the better for me. My company provides service to the power industry. If they are not building and growing, it means that they are paying to extend the life of their existing equipment. In fact, this has been the case since about 2000. The more they continue to do that the more money I make.
I wonder...do you think that a measurable part in the drop, is that of all the Cathode Ray Tube TV screens and computer monitors, being turned off for a final time, and being replaced by lower power consuming LCD monitors and TVs over the last couple of years?
It wasn’t that long ago, that a 19” LCD monitor would set you back a couple of grand...and just yesterday I saw an ad for a 22” LCD screen for less than $300.
Duke Energy asking for 10% raise; may have already been approved. Natural gas, PSNC, actually had a 7% decrease,
It’s the global warming effect, or political hot air, people don’t need to heat their houses as much. < /sarcasm>
Al Gore's home uses twenty times as much energy as the average American home
Foreclosed McMansions don’t use as much electricity.
We switched to LED tree lights when they first came out. We're also using less electricity since our son went to college and we've scrimped on propane.
Shucks, it's 20F outside and my thermostat is set at 66F. That 72F Obamination talks about is just a pipe dream.
I'm no engineer, but if people are using less electricity doesn't the producers costs go down?
Maybe there is an electrical engineer out there that can explain it to me.
Net savings... should be around $40 a month.
I’ve often wondered if there isn’t some sort of bill padding going on, around the Christmas holiday. My power bill goes up considerably for that month, regardless. I’ve never been one for elaborate decorations, so that can’t be it. Last year was a very mild winter, almost hot (high 80’s during the day) into mid-late October, and very little in the way of really cold weather through December, so that can’t be it either.
Funny how that old outdated Supply and Demand economic paradigm works, no matter how much Socialism you throw at it.
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You’ve nailed it ,, 25% rate increases here ,, most of our power comes from natural gas..
65F here in FL! That's -5 in FL temp (anything below 70F is negative.)
Ive often wondered if there isnt some sort of bill padding going on, around the Christmas holiday.
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Many utilities “estimate” your bill to whatever revenue level they need for the month... December/Christmas is month-end/quarter-end/year-end ,, last chance to make the numbers... that and their meter readers want some days off around then too ...
My father used to have this states power companies account for IBM back in the 1980’s and 1990’s ... they work on a “cost plus basis” with their beggings to the public utility commission ,, if they spend $40 million on new mainframes when the “old outdated” one only was used to 10% of capacity and runs all the same software then they get to run up their billings by perhaps $44 million or so “cost plus 10%” ,, same thing goes for all of their infrastructure and labor costs.
Natural Gas prices have been falling steeply as well.
Power plants and transmission lines are a “fixed” cost - the cost of building and operating them does not change whether you use them at 90% of capacity or 70% of capacity. The cost of debt to finance construction doesn’t change with utilization, and the depreciation schedule for taxation doesn’t change with utilization.
When you’re operating at only 70% (eg) of capacity, you have more money tied up in your plant and infrastructure than you need, so your fixed costs per kWh generated are going up.
The variable costs (things like fuel, cooling water pumping costs, etc) and perhaps transmission scheduling costs go down as you operate at lower capacities.
Net:net, due to the fixed costs, your cost per kWh does go up as production goes down, unless the drop in fuel prices is so radical that it completely absorbs the fixed costs.
Turn down the heat are be broke, not much of a choice. I haven’t used ac in years since I found that it would not kill you to be warmer and it was better for your health. Power bill is about 68.00 a month year around.
Since 75 million baby boomer's will die in that period, and no one know what language will be spoken and mud huts don't need power. What third world hell hole will all those uneducated masses come from???
“Name one other business/industry that openly advertises to use less of their product (under the guise of conservation).”
Here’s one: water. Some water companies are now raising their rates because their customers were so diligent about conserving. No good deed goes unpunished.
From the good old US of A, which has the highest rate of population growth of any developed country on earth and the 1.2 million legal immigrants and 500,000 illegals who enter each year. Actually, legal immigration will increase.
Bureau of the Census: An Older and More Diverse Nation by Midcentury
"The nation will be more racially and ethnically diverse, as well as much older, by midcentury, according to projections released today by the U.S. Census Bureau.
Minorities, now roughly one-third of the U.S. population, are expected to become the majority in 2042, with the nation projected to be 54 percent minority in 2050. By 2023, minorities will comprise more than half of all children.
In 2030, when all of the baby boomers will be 65 and older, nearly one in five U.S. residents is expected to be 65 and older. This age group is projected to increase to 88.5 million in 2050, more than doubling the number in 2008 (38.7 million).
Similarly, the 85 and older population is expected to more than triple, from 5.4 million to 19 million between 2008 and 2050.
By 2050, the minority population everyone except for non-Hispanic, single-race whites is projected to be 235.7 million out of a total U.S. population of 439 million. The nation is projected to reach the 400 million population milestone in 2039.
The non-Hispanic, single-race white population is projected to be only slightly larger in 2050 (203.3 million) than in 2008 (199.8 million). In fact, this group is projected to lose population in the 2030s and 2040s and comprise 46 percent of the total population in 2050, down from 66 percent in 2008.
Meanwhile, the Hispanic population is projected to nearly triple, from 46.7 million to 132.8 million during the 2008-2050 period. Its share of the nations total population is projected to double, from 15 percent to 30 percent. Thus, nearly one in three U.S. residents would be Hispanic.
The black population is projected to increase from 41.1 million, or 14 percent of the population in 2008, to 65.7 million, or 15 percent in 2050.
The Asian population is projected to climb from 15.5 million to 40.6 million. Its share of the nations population is expected to rise from 5.1 percent to 9.2 percent.
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