Energy Information Administration / Addendum to Impacts of the 25-Percent RES in the ACESA Discussion Draft,

SR/OIAF/2009-04 (April 2009)

1

Impacts of a 25-Percent Renewable Electricity Standard as Proposed in the American Clean

Energy and Security Act Discussion Draft

Addendum: Projected Expenditure Impacts By Sector

In response to a request from Chairman Edward Markey, the Energy Information Administration

(EIA) prepared a report addressing the projected impacts of a 25-percent renewable electricity

standard (RES) as proposed in the American Clean Energy and Security Act (ACESA)

discussion draft. This addendum responds to a further request from Chairman Markey that EIA

provide additional summary information regarding the projected impacts of the RES on

expenditures for electricity and natural gas in the residential, commercial, and industrial sectors,

spanning the period from 2020, when EIA’s analysis shows that the RES program first becomes

binding on a national basis, to 2030, the end of the projection period for the Annual Energy

Outlook 2009.

The projected impacts of the RES on energy expenditures vary across sectors, the type of fuel

consumed, and the year considered. Electricity expenditures generally rise, reflecting the effect

of the RES in shifting to higher-cost renewable generation sources, while expenditures on natural

gas generally fall, reflecting the reduction in the price of natural gas as electricity sector demand

for that fuel is reduced by the RES. The expenditure changes for electricity and natural gas also

reflect some small impacts of the RES itself and the price changes it causes on projected levels

electricity and natural gas consumption.

Table A1 provides summary information on percentage changes in expenditures relative to the

baseline for the two RES cases considered in EIA’s analysis of the RES. The RES with Full

Efficiency Credits (RESFEC) case assumes that the maximum level of efficiency credits, up to

one fifth of the credits in the target in any given year, are claimed. This is reflected as a 20-

percent reduction in the applicable target for eligible renewable generation. The RES with No

Efficiency Credits (RESNEC) case assumes that States cannot qualify for, or elect not to use,

efficiency credits.

Tables A2 through A4 provide the projections for prices, consumption, and expenditures in the

three sectors that are the basis of the calculations reported in Table A1. All of the information in

these tables is drawn from the summary spreadsheets that will be posted on EIA’s website with

the RES analysis report.
Energy Information Administration / Addendum to Impacts of the 25-Percent RES in the ACESA Discussion Draft, SR/OIAF/2009-04 (April 2009) 2

Table A1 – Percentage Change in Expenditures by Sector – RES Cases Relative to the Reference Case

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Residential Sector

 RESFEC

 Electricity 0.06% 0.22% 0.23% 0.27% 1.13% 1.72% 1.69% 1.23% 0.82% 0.52% 0.16%

 Natural Gas -0.20% -0.09% -0.46% -0.50% -0.62% -1.22% -1.23% -1.41% -1.39% 0.07% -0.35%

 Combined -0.01% 0.13% 0.04% 0.06% 0.66% 0.94% 0.92% 0.53% 0.23% 0.40% 0.02%

 RESNEC

 Electricity 0.01% 0.04% 0.33% 0.73% 1.29% 1.97% 1.74% 1.08% 0.74% 0.51% 0.04%

 Natural Gas -0.92% -1.01% -1.67% -1.90% -2.12% -2.48% -2.60% -2.80% -2.48% -1.48% -1.73%

 Combined -0.25% -0.25% -0.22% 0.02% 0.38% 0.79% 0.59% 0.05% -0.11% -0.02% -0.43%

Commercial Sector

 RESFEC

 Electricity 0.10% 0.35% 0.29% 0.31% 1.36% 2.15% 2.15% 1.76% 1.29% 1.00% 0.53%

 Natural Gas -0.21% -0.05% -0.48% -0.48% -0.57% -1.13% -1.04% -1.15% -1.04% 0.64% 0.07%

 Combined 0.04% 0.27% 0.14% 0.17% 1.00% 1.54% 1.55% 1.21% 0.85% 0.93% 0.44%

 RESNEC

 Electricity 0.01% 0.08% 0.34% 0.90% 1.45% 2.43% 2.18% 1.51% 1.08% 0.79% 0.19%

 Natural Gas -0.91% -0.95% -1.64% -1.81% -1.96% -2.24% -2.27% -2.38% -1.97% -0.80% -1.14%

 Combined -0.17% -0.12% -0.04% 0.39% 0.81% 1.56% 1.35% 0.78% 0.50% 0.49% -0.07%

Industrial Sector

 RESFEC

 Electricity -0.21% -0.09% -0.20% -0.08% 1.26% 2.29% 2.40% 2.10% 1.44% 0.81% 0.27%

 Natural Gas -0.10% -0.22% -0.78% -0.73% -0.39% -1.49% -1.38% -1.82% -1.75% 2.60% 0.41%

 Combined -0.16% -0.15% -0.45% -0.36% 0.56% 0.69% 0.77% 0.38% 0.02% 1.60% 0.33%

 RESNEC

 Electricity -0.34% -0.27% -0.02% 0.56% 1.49% 2.58% 2.37% 1.71% 1.18% 0.68% -0.08%

 Natural Gas -0.99% -1.35% -2.88% -3.15% -2.79% -3.25% -3.42% -3.04% -2.33% 1.16% -0.67%

 Combined -0.62% -0.73% -1.26% -1.03% -0.34% 0.11% -0.11% -0.36% -0.38% 0.89% -0.35%

Source: Energy Information Administration, National Energy Modeling System runs, STIMULUS.D041409A, WAXRPS.D041609A, AND WAXRPSNE.D041609C
Energy Information Administration / Addendum to Impacts of the 25-Percent RES in the ACESA Discussion Draft, SR/OIAF/2009-04 (April 2009) 3

Table A2 – Residential Energy Expenditures

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Reference Case

Electricity

 Prices (cents/kwh) 11.07 11.19 11.26 11.23 11.23 11.23 11.25 11.37 11.51 11.65 11.77

 Sales (billion kWh) 1476 1487 1505 1525 1550 1570 1593 1613 1634 1646 1662

 Expenditures (billion dollars, 2007) 163 166 169 171 174 176 179 183 188 192 196

Natural Gas

 Prices ($/thou. cu ft) 12.91 13.15 13.23 13.01 12.98 12.95 13.14 13.44 13.78 14.06 14.35

 Sales (trillion cu ft) 4.9 4.8 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9

 Expenditures (billion dollars, 2007) 63 64 64 63 64 64 65 66 68 69 70

Combined

 Expenditures (billion dollars, 2007) 226 230 234 235 238 240 244 249 256 260 265

RESFEC Case

Electricity

 Prices (cents/kwh) 11.07 11.21 11.29 11.27 11.38 11.47 11.50 11.58 11.68 11.78 11.85

 Sales (billion kWh) 1477 1487 1504 1524 1547 1563 1584 1603 1624 1636 1653

 Expenditures (billion dollars, 2007) 163 167 170 172 176 179 182 186 190 193 196

Natural Gas

 Prices ($/thou. cu ft) 12.88 13.14 13.17 12.94 12.88 12.77 12.95 13.21 13.55 14.04 14.28

 Sales (trillion cu ft) 4.9 4.8 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9

 Expenditures (billion dollars, 2007) 63 64 64 63 63 63 64 65 67 69 70

Combined

 Expenditures (billion dollars, 2007) 226 230 234 235 239 242 246 251 256 262 266

RESNEC Case

Electricity

 Prices (cents/kwh) 11.06 11.19 11.31 11.34 11.42 11.52 11.53 11.58 11.67 11.79 11.85

 Sales (billion kWh) 1477 1487 1503 1522 1545 1561 1581 1602 1623 1635 1651

 Expenditures (billion dollars, 2007) 163 166 170 173 176 180 182 185 190 193 196

Natural Gas

 Prices ($/thou. cu ft) 12.77 13.00 12.98 12.72 12.65 12.56 12.73 12.98 13.35 13.77 14.03

 Sales (trillion cu ft) 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9

 Expenditures (billion dollars, 2007) 62 63 63 62 62 62 63 64 66 68 69

Combined

 Expenditures (billion dollars, 2007) 226 230 233 235 239 242 245 250 256 260 264

Source: Energy Information Administration, National Energy Modeling System runs, STIMULUS.D041409A, WAXRPS.D041609A, AND WAXRPSNE.D041609C
Energy Information Administration / Addendum to Impacts of the 25-Percent RES in the ACESA Discussion Draft, SR/OIAF/2009-04 (April 2009) 4

Table A3 – Commercial Energy Expenditures

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Reference Case

Electricity

 Prices (cents/kwh) 9.42 9.55 9.64 9.62 9.62 9.60 9.61 9.72 9.87 9.99 10.12

 Sales (billion kWh) 1620 1642 1664 1688 1714 1741 1768 1793 1818 1841 1864

 Expenditures (billion dollars, 2007) 153 157 160 162 165 167 170 174 179 184 189

Natural Gas

 Prices ($/thou. cu ft) 11.39 11.63 11.72 11.53 11.51 11.47 11.67 11.97 12.31 12.58 12.87

 Sales (trillion cu ft) 3.2 3.2 3.2 3.3 3.3 3.3 3.4 3.4 3.4 3.4 3.4

 Expenditures (billion dollars, 2007) 37 38 38 38 38 38 39 41 42 43 44

Combined

 Expenditures (billion dollars, 2007) 190 194 198 200 203 206 209 215 221 227 233

RESFEC Case

Electricity

 Prices (cents/kwh) 9.44 9.59 9.67 9.66 9.78 9.86 9.89 9.97 10.07 10.16 10.24

 Sales (billion kWh) 1620 1641 1662 1686 1709 1732 1756 1780 1804 1828 1852

 Expenditures (billion dollars, 2007) 153 157 161 163 167 171 174 177 182 186 190

Natural Gas

 Prices ($/thou. cu ft) 11.36 11.62 11.65 11.45 11.41 11.28 11.47 11.73 12.07 12.56 12.79

 Sales (trillion cu ft) 3.2 3.2 3.2 3.3 3.3 3.4 3.4 3.4 3.4 3.4 3.5

 Expenditures (billion dollars, 2007) 37 38 38 38 38 38 39 40 41 43 44

Combined

 Expenditures (billion dollars, 2007) 190 195 199 200 205 209 213 218 223 229 234

RESNEC Case

Electricity

 Prices (cents/kwh) 9.42 9.56 9.68 9.72 9.80 9.89 9.90 9.95 10.05 10.15 10.21

 Sales (billion kWh) 1621 1642 1663 1685 1708 1730 1754 1779 1803 1827 1851

 Expenditures (billion dollars, 2007) 153 157 161 164 167 171 174 177 181 185 189

Natural Gas

 Prices ($/thou. cu ft) 11.25 11.47 11.46 11.23 11.17 11.08 11.24 11.49 11.87 12.28 12.53

 Sales (trillion cu ft) 3.2 3.2 3.3 3.3 3.3 3.4 3.4 3.4 3.5 3.5 3.5

 Expenditures (billion dollars, 2007) 36 37 37 37 37 38 38 40 41 43 44

Combined

 Expenditures (billion dollars, 2007) 189 194 198 201 205 209 212 217 222 228 233

Source: Energy Information Administration, National Energy Modeling System runs, STIMULUS.D041409A, WAXRPS.D041609A, AND WAXRPSNE.D041609C
Energy Information Administration / Addendum to Impacts of the 25-Percent RES in the ACESA Discussion Draft, SR/OIAF/2009-04 (April 2009) 5

Table A4 – Industrial Energy Expenditures

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Reference Case

Electricity

 Prices (cents/kwh) 6.42 6.51 6.59 6.59 6.59 6.59 6.60 6.69 6.81 6.92 7.02

 Sales (billion kWh) 1020 1021 1018 1022 1025 1025 1020 1013 1004 995 986

 Expenditures (billion dollars, 2007) 65 66 67 67 68 68 67 68 68 69 69

Natural Gas

 Prices ($/thou. cu ft) 7.68 7.89 7.97 7.77 7.76 7.67 7.81 8.08 8.42 8.66 8.94

 Sales (trillion cu ft) 6.4 6.4 6.4 6.5 6.5 6.5 6.5 6.5 6.5 6.3 6.3

 Expenditures (billion dollars, 2007) 49 50 51 50 50 50 51 53 55 55 57

Combined

 Expenditures (billion dollars, 2007) 114 117 118 118 118 117 118 120 123 124 126

RESFEC Case

Electricity

 Prices (cents/kwh) 6.42 6.53 6.61 6.61 6.71 6.79 6.81 6.88 6.96 7.03 7.07

 Sales (billion kWh) 1018 1017 1013 1017 1020 1019 1013 1007 998 988 981

 Expenditures (billion dollars, 2007) 65 66 67 67 68 69 69 69 69 69 69

Natural Gas

 Prices ($/thou. cu ft) 7.65 7.88 7.91 7.70 7.64 7.46 7.59 7.83 8.17 8.66 8.85

 Sales (trillion cu ft) 6.4 6.4 6.4 6.5 6.6 6.6 6.6 6.6 6.6 6.5 6.4

 Expenditures (billion dollars, 2007) 49 50 51 50 50 49 50 52 54 56 57

Combined

 Expenditures (billion dollars, 2007) 114 117 118 117 119 118 119 121 123 126 126

RESNEC Case

Electricity

 Prices (cents/kwh) 6.41 6.51 6.62 6.66 6.73 6.82 6.82 6.86 6.95 7.03 7.06

 Sales (billion kWh) 1018 1018 1013 1016 1019 1017 1011 1006 997 987 979

 Expenditures (billion dollars, 2007) 65 66 67 68 69 69 69 69 69 69 69

Natural Gas

 Prices ($/thou. cu ft) 7.53 7.73 7.71 7.47 7.42 7.27 7.39 7.61 7.99 8.39 8.59

 Sales (trillion cu ft) 6.4 6.4 6.4 6.5 6.6 6.6 6.6 6.7 6.7 6.6 6.6

 Expenditures (billion dollars, 2007) 48 50 50 49 49 48 49 51 53 55 56

Combined

 Expenditures (billion dollars, 2007) 114 116 117 116 118 118 118 120 123 125 125

Source: Energy Information Administration, National Energy Modeling System runs, STIMULUS.D041409A, WAXRPS.D041609A, AND WAXRPSNE.D041609C