Electric Usage Down In U.S.

Here is another unheard of story in the U.S., consumers are consuming less electricity which sends utilities into thinking mode.

The gist, up until now, the quiet utilities were bracing themselves for a clear and bright future with talks around electric vehicles, EV and plug-in hybrids, PHEV.  After all, who stands to win in a switch from petroleum to electricity?  However, the dire effects of a worldwide economic crisis is taking a bite out of everyone’s business profits, theirs included.  For the first times in decades, U.S. consumers are worried and are following the lead from the European and Asian counterparts, they are slowing down their purchases and waiting to see what they future holds.

The Wall Street Journal wrote, via Rebecca Smith that utilities are worried consumers might become thrifty and actually use less electricity, if these last few months was anything to go by.  Obviously, this means good things for the environment but what about the much needed improvements and upgrade to the grid infrastructure and the new renewable energy farms?

The numbers, Xcel Energy Inc. experienced their home-energy usage drop 3% between August and September, the first time in 40 years.  Duke Energy Corp.’s third-quarter was down 5.9%, with a 9% drop from residential.  Sales were down 4.3% for the three-month period ending Sept. 30 from a year earlier.  And American Electric Power Co. saw their consumption drop 3.3% in the same period from the prior year. Among residential customers, the drop was 7.2%.

The future, even though the data is of yet incomplete, in a perfect catch 22 situation, a downtrend in consumption would have negative effects when utilities were expected to invest $1.5 trillion to $2 trillion by 2030 to modernize the grid, according to an industry-funded study by the Brattle Group.  If electricity demand remains low, utilities will have to adjust their operations and investments which would be passed onto customers and shareholders.

The answer? There is no crystal ball and certainly not one answer fits all, but utilities will need to continue to work with innovative systems, such as V2G so that current and future PHEVs can help balance the grid load, as well as increase the reliability of weather-adjustment models, and of course, continue working on possible projects to harness natural and renewable energy sources.

In conclusion, this could be just a hiccup in consumption trends but if it persists, it will deeply effect how utilities work and tackle the much needed project to update their aging grid, as well as add new cleaner energy sources.  The pros are that fuel costs are bottoming out, inciting a short sighted confidence in some drivers who will want to start spending more.  The cons are that many drivers have felt the pinch of high gas prices and were caught shoving $200 into their trucks and SUV over the summer.  Once bitten, twice shy?