Over the past quarter-century, the electric utility industry has undergone oil embargoes, economic recessions, increasing regulatory complexity, and great advances in technology. Perhaps the two best adjectives to describe the last 25 years are "uncertainty" and "change." With deregulation and restructuring upon us, the pace of this change and uncertainty is accelerating. But one thing remains constant: When it comes to presidential elections, growth in electric demand is a good indicator of an incumbent's chances for reelection. Electricity is not a primary driver for voters, but economic growth and stability clearly are (em and the economy is closely intertwined with electricity demand.
During the past six presidential election years, only twice did the annual growth in electric demand increase at a rate of less than 4 percent (see Figure 1). In those years, incumbents were replaced. In 1980, Jimmy Carter, unable to curtail the nation's economic slide, was defeated by Ronald Reagan. In 1992, George Bush, unable to instill confidence in voters at the end of an economic slowdown, was defeated by Bill Clinton. Ironically, electric load declined in 1992 for only the third time in over 50 years.
The first annual decline occurred in 1974, following four consecutive years of robust growth during which electricity sales averaged just over 6.8 percent. By 1975, the economy and electricity sales (up 2.4 percent) began to recover. But although electric demand increased by more than 6.2 percent in 1976, the nation's distrust of the post-Watergate Republican Party was too much to overcome, and Jimmy Carter was elected President.