To view this page ensure that Adobe Flash Player version 11.1.0 or greater is installed.

SCOTTMADDEN, INC. | 31 DECLINING ELECTRIC DEMAND: NUANCES TO THE NOT-SO-SIMPLE STORY Analyzing the well-publicized trend reveals interesting variations and linkages. Reading the Headlines: Where’d the Load Growth Go? • Retail sales of electricity have declined five out of the past eight years, with MWh sales increasing only 1.7% cumulatively since 2005 • Industry consensus views recent performance as the continuation of a historical downward trend in demand growth (see Fig. 1). However, opinions differ on the primary causes of decline and whether the decline will continue • Many observers suggest some combination of macro phenomena, including de-industrialization, slowing population and GDP growth, and large-scale energy efficiency improvements • Much has been attributed to lower energy intensity, but that measure contains many potential drivers and attributing causation has challenged analysts • Revenues per MWh, however, have continued to grow, even as volumetric sales growth has been slowing Figure 1 U.S. Electric Retail MWh Sales Growth (3-Year Moving Average) (1950 to 2015) Annual % Change in Total MWh Sales of Electricity 4.4% 13% Year-Over-Year Percentage Change in 3YMA 12% 11% Aggregate retail electricity sales have been declining and, after a short spike during recovery from the Great Recession, remains basically flat 10% 9% 8% 2.6% CUMULATIVE 1.7% 7% 0.8% 6% 0.2% 2006 2007 2008 2009 5% 4% 2010 2011 2012 -0.1% -0.8 3% 2013 1.1% 2014 2015 SINCE 2005 -1.1% -1.5% 2% 1% 0% -1% 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 -3.7% Source: EIA