"We expect higher wholesale #electricity prices this winter in every region of the country. Our forecast for wholesale winter electricity prices ranges from 31% higher in the Southwest to more than 60% higher in the mid-Atlantic and Central regions. #STEO," the tweet read.
The EIA also reported that Florida, which maintains its own electricity supply region, will likely see average electricity prices sit 52% higher this winter than they were in winter in 2021.
The U.S. has 11 Short-Term Energy Outlook (STEO) electricity supply regions that the EIA analyzes every month. December's data shows that nationwide average on-peak wholesale electricity prices are expected to rise by approximately 50.6%. Mid-Atlantic (PJM) and central region (SPP) states that rely on their respective electricity supply chains are expected to see the highest price increases during this winter when compared to this time period last year. The 2022-23 electricity prices forecast for both regions from December through February will be approximately 62% higher than that of the 2021-22 winter period. In addition, the New England region, which is set to experience the highest wholesale prices in the 2022-23 winter season, is also expected to average in excess of $180 per megawatt-hour, with the wholesale electricity price potentially peaking higher than $200/MWh in January. This figure is approximately three times higher than peak rates elsewhere in the United States.
The EIA also expects retail electricity prices to be higher this winter, with residential electricity prices forecasted to average 14.5 cents per kilowatt-hour from December through February, which is 6% higher than the 2021 winter season. Nationwide, price increases range from an 18% hike in the New England region to a negligible change in the West North Central region.
The Administration also expects limited natural gas production in the Permian Basin to continue as late as early 2023, with said scenario primarily caused by the pipeline's inability to bring associated natural gas production to the market. Other factors contributing to the expected higher prices include higher winter natural gas demand and rising liquid natural gas (LNG) exports.
Further data from the EIA reveals that the American west coast will experience the lowest winter-over-winter price increase, although the spike is still noteworthy. The California Independent System Operator (ISO) electricity supply chain region will see 33% higher prices this winter compared to this time last year.