6.1. ERMUSR 08-11-2009 - Laserfiche WebLink

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Public Power Weekly With industrial sales slumping, total U.S. electricity demand is expected to drop 2% this year and then rise by 0.8% in 2010, the Energy Information Administration said in its July Short-Term Energy Outlook. Retail sales of electricity in the industrial sector were down 12% during the first quarter of 2009 compared with first quarter 2008 levels, the EIA said. The agency last month had projected a 1.8% drop in demand for 2009 and a 1.2% increase in 2010. Total natural gas consumption is projected to decline by 2.3% in 2009 and remain unchanged in 2010, EIA said. Poor economic conditions are expected to prolong the current slump in natural gas demand over the coming months, led by an 8.2% drop among industrial users in 2009. While consumption is expected to fall in the residential and commercial sectors as well this year, competitive natural gas prices relative to coal are projected to lead to a 2.4% increase in electric power sector consumption in 2009, EIA said. Natural gas consumption in the electric power sector is expected to decline by 1 % in 2010 as natural gas prices rise and coal regains a larger share of the baseload generation mix, EIA said. Natural gas prices are expected to recover in early 2010 as the market balance tightens, EIA said. The Henry Hub spot price is expected to average $4.22 per Mcf in 2009 and $5.93 per Mcf in 2010. Residential electricity prices rose by 8% during the first quarter of 2009 compared with the first quarter of 2008. EIA expects lower generation fuel costs to be passed through to retail consumers later this year, keeping the annual average growth in prices at around 4.7% and 3.3% in 2009 and 2010, respectively. 2009 would be the first year since 2002 that electric power sector consumption would drop below a billion short tons. It is projected to be 990 million short tons this year, EIA said. The 5.2% decline in coal consumption in the electric power sector is the result of lower total electricity generation coupled with projected increases from other generating sources, including natural gas, nuclear, hydroelectric and wind. Coal consumption in the electric power sector is expected to increase by 1.6% in 2010 as natural gas prices rise and coal regains a larger share of the baseload generation mix. -ROBERT VARELA R.W. Beck to be acquired by SAIL' R.W. Beck Group Inc. signed an agreement to be bought by Science Applications International Corp., pending shareholder approval. SAIC is a http://www.naylometwork.com/app-ppw/printFriendly.asp?projlD=3214 (7 of 21)7/28/2009 3:37:08 AM