ElectricityMatch.com provides an overview of electric utility fuel sources and prices in the United States. It finds that while natural gas generation has increased due to lower emissions, coal still accounts for about half of all generation. Natural gas prices are more volatile than stable coal prices. Overall, average retail electric prices have steadily increased in recent decades. Renewable energy makes up a small and growing and share of generation. Rapidly phasing out coal may significantly increase electric prices unless alternatives can reasonably replace it without major rate changes.

1. Electric Utility Fuel Sources and Prices
ElectricityMatch.com

2. ElectricityMatch.com
We created ElectricityMatch.com based on the simple truth that searching for great
electricity offers is of no value unless you actually find one that matches your needs.
Your time is valuable and you want to see competitive offers presented in a clear and
easy-to-read format. You need choices free from gimmicks and confusing jargon. You
want to work with top-rated energy providers that consistently deliver what they sell.
About ElectricityMatch
About Charlie Hewitt
Charlie Hewitt has 25 years of in-depth energy experience having
served in executive and managerial roles at some of the largest
retail energy providers in North America. His expertise covers a
wide range of retail energy disciplines including pricing,
contracting, risk management, and credit. He holds an MBA from
UT Arlington, MA and BS degrees in geology from UT Austin, and
was a TXU environmental research fellow.

3. ElectricityMatch.com
Electric power generation sources are receiving more attention now than in
the past. The call to reduce carbon emissions has resulted in a debate on
how to meet growing energy demand while keeping electricity costs at
reasonable levels.
Topics being debated on the national stage include:
• Shale gas production from hydraulic fracturing
• Standards to increase renewable energy installed capacity
• EPA proposals that would require a significant reduction in coal-fired
electricity generation
When considering these issues, it is important to separate emotion from
fact. This presentation will provide a brief overview of how our electricity is
generated, price trends for fossil fuels used in electric generation, and price
trends in retail electric prices
Introduction

4. ElectricityMatch.com
The following slide shows electric utility net generation in terawatt-hours
for the time period 2001 thru 2013.
Key points illustrated on the graph include:
• Electricity production from coal has trended downward due to plant
retirements and the increase in natural gas-fired generation.
• Natural gas-fired electricity generation has surged due to its preferable
emissions byproducts levels and the increase in fuel supply from shale
gas production.
• Conventional hydroelectric generation has remained steady as new
projects are difficult to permit due to environmental concerns.
• Nuclear power generation has declined slightly through unit retirement.
• Electricity from renewable energy generation sources, while growing at
an ever-increasing rate, is still a small component of our national
generation mix.
Fuel Sources

5. ElectricityMatch.com
U.S. ELECTRIC UTILITY NET GENERATION
BY FUEL SOURCE
0
200
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2000 2002 2004 2006 2008 2010 2012 2014
TWH
COAL NATURAL GAS NUCLEAR CONVENTIONAL HYDRO OTHER RENEWABLES
Source: U.S. Energy Information Administration

6. ElectricityMatch.com
The following slide shows the delivered cost to electric utilities for coal and
natural gas from 2008 thru 2014.
The key point here is that the cost of coal has been extremely flat and
stable during this time period. This has occurred despite a general
downward trend in productivity (short tons/labor hour) during that time
period. While the U.S. coal industry is far from thriving, it has excelled in
delivering its product at a consistent price.
Natural gas, while seen as a cleaner fossil fuel alternative to coal, is subject
to significant price volatility. The extreme cold experienced in early 2014 in
the northeastern U.S. demonstrates that natural gas prices can be highly
volatile due to transportation and short-term supply challenges.
Coal and Natural Gas Price Trends

7. ElectricityMatch.com
Source: U.S. Energy Information Administration
$0
$2
$4
$6
$8
$10
$12
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14
DELIVEREDCOSTPER/MMBTU
NATURAL GAS COAL
U.S. AVERAGE DELIVERED FUEL COST
FOR ELECTRIC UTILITIES

8. ElectricityMatch.com
The following slide shows the average retail electric price by sector for 2001
thru 2013.
The overall trend is that prices are steadily increasing. There is a muted
spike in late 2005 associated with hurricanes Katrina and Rita that impacted
production and transportation hubs. A more pronounced increase occurred
in the late 2007 and early 2008 as natural gas prices spiked.
Most marginal generation is natural gas fired which results in a high
correlation between retail electricity prices and natural gas prices.
Retail Electricity Price Trends

9. ElectricityMatch.com
Source: U.S. Energy Information Administration
0
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2000 2002 2004 2006 2008 2010 2012 2014
CENTS/KWH
RESIDENTIAL COMMERCIAL INDUSTRIAL TRANSPORTATION
AVERAGE RETAIL PRICE OF ELECTRICITY
BY SECTOR

10. ElectricityMatch.com
Coal-fired generation still accounts for about half of all U.S. electricity
generation. Renewable energy generation remains a growing but very
small component of overall electricity generation. Hydroelectric and
nuclear generation are relatively stable contributors to the generation mix
but new capacity in these categories is not being contemplated.
Before shuttering the coal-fired generation fleet, it is important to consider
what other electricity generation sources could reasonably take its place
without significantly changing energy rates. Also, we must consider what
timeline would be reasonable to accomplish even a partial phasing-out of
coal-fired generation.
Increasing electric price volatility by greater reliance on natural gas
generation is likely. Expecting renewable energy generation to pick up
coal’s market share is unrealistic unless the time horizon for this concept is
extended several decades.
Conclusion