PUF Quant Services

Deck: 

Monthly Summary Report: Oct. 2017

PUF 2.0 - October 15, 2017

Sections:

I. PUF QS Electricity Value Index

II. PUF QS Zero-Carbon Scorecard

III. PUF QS Distributed Intermittent Metric

 

Public data from the U.S. Departments of Commerce, Energy, Housing and Urban Development, and Labor are available to anyone. But quant Steve Mitnick has been compiling components of these data that few noticed or used, years before he became PUF Editor-in-Chief, for unique insightful analyses about utility regulation and policy.

Now, with PUF QS, we provide these analyses to members of the PUF community with site licenses. For further information, reach out to Joe Paparello, paparello@fortnightly.com.

 

I. PUF QS Electricity Value Index, October 2017

Electric rates and bills generally increase over time. Sure. But the price of most goods and services, and what we pay for most goods and services over a month or year, generally increases.

Electricity in this regard is no different from any other good or service. There's inflation in our economy. There's growing income, averaged. And with growing income, there are growing consumer expenditures.

What counts to consumers, or should count, is the horse race. Which horse (good or service) is gaining ground on the others? Which is falling further behind?

Those goods and services that are gaining ground, in their consumer prices or payments, are becoming more expensive. Those falling further behind are becoming less expensive.

Some consumer costs have increased rapidly. Health care and college tuition are prime examples. Some costs have increased but at a slower pace, like housing. Or have decreased, like clothing.

In an economy like ours, with inflation, something becomes more expensive if its price increases faster than the price of everything, averaged. And with growing income and consumer expenditures, something becomes more expensive if what we pay over a month or year increases faster than what we pay for everything.

Let's see how electricity is doing in this horse race of prices and payments over time.

 

CPI Electric Rates vs. CPI Inflation

To track the average price of the goods and service that American consumers buy, the U.S. Department of Labor calculates the Consumer Price Index.

There's a CPI for all the goods and services that consumers buy. And there's a CPI for categories of goods and services, including residential electric rates.

Compare the CPI for electric rates with the CPI for all goods and services. Doing so shows if electric rates are increasing faster or slower than the price of other things. And, therefore, it shows if electricity is becoming costlier or less costly to consumers.

The following percentages are easy to understand. 100% means the CPI for electric rates and the CPI for all goods and services increased at the same pace since the Labor Department's base period (the years 1982 through 1984). At 100%, electric rates aren't becoming costlier, and they aren't becoming less costly.

The lower that these percentages are, the slower the CPI for electric rates has risen as compared to the CPI for all goods and services. So, the lower these percentages are, the less costly electricity has become.

CPI Electric Latest Month - U.S. (September 2017): 88.4%

Record High (June, August 1955): 106.7%
Record Low (May, June 2000): 74.3%
Year Earlier (September 2016): 88.8%
Two Years Earlier (September 2015): 90.0%
Five Years Earlier (September 2012): 87.6%
Ten Years Earlier (September 2007): 88.4%

CPI Electric Latest Quarter - U.S. (Q2 2017): 86.6%

Record High (Q2, Q3 1955): 106.4%
Record Low (Q3 2000): 74.4%
Year Earlier (Q3 2016): 88.9%
Two Years Earlier (Q3 2015): 90.4%
Five Years Earlier (Q3 2012): 88.1%
Ten Years Earlier (Q3 2007): 88.5%

CPI Electric Latest Year - U.S. (2016): 86.2%

Record High (1955): 106.2%
Record Low (2000): 74.6%
Year Earlier (2015): 88.3%
Two Years Earlier (2014): 87.9%
Five Years Earlier (2011): 87.5%
Ten Years Earlier (2006): 83.9%
 
CPI Electric Latest Month - Northeast (September 2017): 77.6%
CPI Electric Latest Month - South (September 2017): 81.7%
CPI Electric Latest Month - Midwest (September 2017): 94.2%
CPI Electric Latest Month - West (September 2017): 112.0%

 

Source: Bureau of Labor Statistics, U.S. Department of Labor. Public Utilities Fortnightly maintains a comprehensive historical and updated data base of the CPI for electric rates, the CPI for all goods and services, and our own analyses of these indices. Sixty-five years of monthly U.S. data. Forty years of monthly regional data.

 

Electric Bills' Share of  Consumer Expenditures

The U.S. Department of Commerce calculates the Gross Domestic Product. Since consumer expenditures are around seventy percent of the GDP, the Commerce Department tracks consumer expenditures in extraordinary detail.

The following percentages are easy to understand. 2% means that one-fiftieth of consumer expenditures goes to pay electric bills. 1% means that one-hundredth of consumer expenditures goes to pay electric bills.

The lower these percentages are, the smaller is electricity's share of consumers' budgets. And the larger is the share of consumers' budgets for all other goods and services.  

So, the lower these percentages are, the less costly electricity has become. And the wealthier that consumers have become.

Electricity Share Latest Month - U.S. (August 2017): 1.30%

Record High (June 1981): 2.53%
Record Low (January, February 2017): 1.24%
Year Earlier (August 2016): 1.45%
Two Years Earlier (August 2015): 1.41%
Five Years Earlier (August 2012): 1.48%
Ten Years Earlier (August 2007): 1.63%

Electricity Share Latest Quarter - U.S. (Q2 2017): 1.35%

Record High (Q3 1983): 2.37%
Record Low (Q1 2017): 1.28%
Year Earlier (Q2 2016): 1.37%
Two Years Earlier (Q2 2015): 1.43%
Five Years Earlier (Q2 2012): 1.52%
Ten Years Earlier (Q2 2007): 1.51%

Electricity Share Latest Year - U.S. (2016): 1.38%

Record High (1982): 2.27%
Record Low (2016): 1.39%
Year Earlier (2015): 1.44%
Two Years Earlier (2014): 1.49%
Five Years Earlier (2011): 1.56%
Ten Years Earlier (2006): 1.51%

Source: Bureau of Economic Analysis, U.S. Department of Commerce. Public Utilities Fortnightly maintains a comprehensive historical and updated data base of consumer expenditures, and our own analyses of the data. Fifty-eight years of monthly data.

 

II. PUF QS Zero-Carbon Scorecard, October 2017

Many Americans want their electricity to be low-carbon (emitting little carbon dioxide when the electricity is produced). Some go further; they want their electricity to be zero-carbon.

The industry, responding, is moving to the green grid. It's growing the zero-carbon share of the total. From hydro, nuclear, solar, wind, and other methods of manufacturing electricity that don't emit carbon dioxide. And it's pruning back the high-carbon share of generation, from coal.

How's it going, this gardening of the green grid? Let's see.

 

Zero-Carbon's Share of Grid Generation

The U.S. Department of Energy tracks in extraordinary detail the origin of the grid's electricity. Each month, it publishes total electric generation and the breakdown by manufacturing method.

ABB Market Intelligence Workshop September 13, New York

Some of these methods emit carbon dioxide. Coal, natural gas, other gases, petroleum. Some don't. Net. Geothermal, hydro, nuclear, solar, waste, wind, wood.

The Scorecard adds the amount of the grid's electricity produced by the zero-carbon methods. And then calculates their share of all grid electricity.

The following percentages are easy to understand. 25.0% would mean that a quarter of the grid's electricity is zero-carbon. The U.S. grid hit and surpassed 40.0% zero-carbon for the first time in March 2016. At 40.0%, four of every ten kilowatt-hours produced by the grid didn't emit carbon dioxide.

Zero-Carbon Latest Month (July 2017): 31.4%

Record High (March 2017): 41.6%
Record Low (September 1973): 16.2%
Year Earlier (July 2016): 29.2%
Two Years Earlier (July 2015): 28.9%
Five Years Earlier (July 2012): 27.1%
Ten Years Earlier (July 2007): 26.6%

Zero-Carbon Latest Quarter (Q1 2017): 39.2%

Record High (Q1 2017): 40.4%
Record Low (Q3 1973): 16.6%
Year Earlier (Q2 2016): 36.3%
Two Years Earlier (Q2 2015): 34.0%
Five Years Earlier (Q2 2012): 32.6%
Ten Years Earlier (Q2 2007): 29.4%

Zero-Carbon Latest Year (2016): 35.1%

Record High (2016): 35.1%
Record Low (1973): 19.5%
Year Earlier (2015): 33.1%
Two Years Earlier (2014): 32.8%
Five Years Earlier (2011): 31.8%
Ten Years Earlier (2006): 28.9%
 

Hydro's, Nuclear's, Solar's, Wind's Share of Grid Generation

Here we show the shares of the grid's electricity by four major zero-carbon methods: hydro, nuclear, solar, wind.

The grid's solar and wind are rapidly growing. And, so, their latest numbers are typically record highs or nearly so. Nuclear has maintained a share near its record high for over two decades. Hydro, on the other hand, has been well below its record high in recent decades.

Hydro Latest Month (July 2017): 6.6%

Record High (April 1974): 19.8%

Record Low (September 2007): 4.1%

 

Nuclear Latest Month (July 2017): 17.8%

Record High (January 1995): 22.6%

Record Low (January, May 1973): 3.9%

 

Solar Latest Month (July 2017): 1.4%

Record High (May, June 2017): 1.8%

Record Low (all but six months before March 2012): 0.0%

 

Wind Latest Month (July 2017): 3.9%

Record High (April 2017): 8.6%

Record Low (most months before January 1998): 0.0%

 

Coal's Share of Grid Generation

Here we show the share of the grid's electricity by the major high-carbon method, coal. Its share has been at or near a record low in recent years. And around half of its record high set in the 1980's.

Coal Latest Month (June 2017): 32.1%

Record High (January 1986): 59.8%

Record Low (March 2016): 23.7%

 

Source: Energy Information Administration, U.S. Department of Energy. Public Utilities Fortnightly maintains a comprehensive historical and updated data base of grid generation by method, and our own analyses of these indices. Forty-four years of monthly data.

 

III. PUF QS Distributed Intermittent Metric, October 2017

The pages of Public Utilities Fortnightly and discussions generally in the utilities industry often address the growth in distributed and intermittent electric generation and its implications. But how rapid is this growth? And is the pace increasing or decreasing? The answers to these questions can dictate utility strategies and regulatory policies.

The nation's electricity supply, particularly beyond the state of California, remains overwhelmingly grid-scale, more than ninety-nine percent. California distributed generation, alone, is over four-tenths of that narrow one-percent slice.

However, intermittent (weather-dictated) generation can be and is most frequently grid-scale. As a result, while the nation's electricity supply remains mostly dispatchable, nearly ten percent is now wind and solar photovoltaic, and intermittent.

 

Distributed Generation's Share of Grid and Distributed Generation

The U.S. Department of Energy tracks in extraordinary detail the origin of the grid's electricity, as stated earlier. Each month, it publishes total electric generation and the breakdown by manufacturing method. Recently, the Energy Department started publishing data on distributed generation to supplement its data on grid-scale generation.  

This metric is the percentage of all electricity generation, grid-scale and distributed generation, that is attributable to distributed generation.

The following percentages are easy to understand. 0.5% means that one out of every two hundred kilowatt-hours of our nation's electricity are produced by distributed generation (mainly residential, commercial and industrial solar photovoltaic). When the percentage reaches 1.0% in the next few years, this would mean that one out of every one hundred kilowatt-hours are produced by distributed generation.

Distributed Latest Month (June 2017): 0.7%

Record High (April, May 2017): 0.8%
Year Earlier (July 2016): 0.5%
Two Years Earlier (July 2015): 0.4%

Distributed Latest Quarter (Q2 2017): 0.7%

Record High (Q2 2017): 0.7%
Year Earlier (Q2 2016): 0.6%
Two Years Earlier (Q2 2015): 0.4%

Distributed Latest Year (2016): 0.5%

Record High (2016): 0.5%
Year Earlier (2015): 0.3%
Two Years Earlier (2014): 0.3%

Residential Distributed Latest Month (July 2017): 0.4%
Commercial Distributed Latest Month (July 2017): 0.2%
Industrial Distributed Latest Month (July 2017): 0.1%

 

Intermittent Generation's Share of Grid and Distributed Generation

The U.S. Department of Energy tracks in extraordinary detail the origin of the grid's electricity, as stated earlier. Each month, it publishes total electric generation and the breakdown by manufacturing method. Recently, the Energy Department started publishing data on distributed intermittent generation to supplement its data on grid-scale generation.  

This metric adds the generation from grid-scale wind and grid-scale solar photovoltaic and from distributed generation solar photovoltaic. Distributed generation wind is presently at a relatively insignificant level.

The following percentages are easy to understand. 10.0% means that one out of every ten kilowatt-hours of our nation's electricity are produced by intermittent generation (mainly residential, commercial and industrial solar photovoltaic). When the percentage reaches 20.0% in the future, this would mean that one out of every one five kilowatt-hours are produced by distributed generation.

Intermittent Latest Month (July 2017): 5.9%

Record High (April 2017): 11.0%
Year Earlier (July 2016): 5.7%
Two Years Earlier (July 2015): 4.4%
ABB Market Intelligence Workshop September 13, New York

Intermittent Latest Quarter (Q2 2017): 9.3%

Record High (Q2 2017): 9.3%
Year Earlier (Q2 2016): 7.3%
Two Years Earlier (Q2 2015): 6.1%

Intermittent Latest Year (2016): 6.8%

Record High (2016): 6.8%
Year Earlier (2015): 5.5%
Two Years Earlier (2014): 5.1%

 

Source: Energy Information Administration, U.S. Department of Energy. Public Utilities Fortnightly maintains a comprehensive historical and updated data base of generation by method, and our own analyses of these indices. Forty-four years of monthly data for grid generation and three years for distributed generation. The Energy Department started collecting distributed generation data in 2014.