AP: Residential Electric Demand Growth Rate in Long Term Decline

I saw this Associated Press story in today’s print version of the Charleston Gazette.  The next time you hear a power company PR guy or a misinformed reporter claim that declines in electrical demand growth are the result of “the recession,” show them this article.

The story clearly documents that the decline in residential demand growth is a long term trend resulting from improvements in efficiency and long term housing trends.

Remember those PATH TV ads that claimed electricity demand was projected to rise for decades?  Not true.  And the power companies knew it.

From 1980 to 2000, residential power demand grew by about 2.5 percent a year. From 2000 to 2010, the growth rate slowed to 2 percent. Over the next 10 years, demand is expected to decline by about 0.5 percent a year, according to the Electric Power Research Institute, a nonprofit group funded by the utility industry.

Overall demand, including from factories and businesses, is still expected to grow, but at only a 0.7 percent annual rate through 2035, the government says. That’s well below the average of 2.5 percent a year the past four decades.

Utility executives have been aware that the rate of demand growth is slowing, but a more dramatic shift than they expected may be under way. Executives were particularly surprised by a dip during the first three months of this year, the most recent national quarterly numbers available. Adjusted for the effects of weather, residential power demand fell 1.3 percent nationwide, an unusually sharp drop.

Executives and analysts are perplexed because residential demand doesn’t usually track economic ups and downs very closely. Even when the economy is stagnant, people still watch TV and keep their ice cream cold.

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