A new year comes with the promise of new beginnings. 2022 brought record-high prices in the energy market for natural gas, which is the primary fuel source for electricity generation in the United States, according to the Energy Information Administration (EIA). Co-op members across the state and the nation saw higher electric bills in 2022 as generation and transmission cooperatives worked with distribution cooperatives to ensure adequate power supply given significant volatility in the energy market. Many electric co-ops throughout the country implemented electric rate increases after the price of natural gas used to generate power increased by 60% in 2021 and 160% in 2022.
Why were prices higher in 2022, specifically in the summer? Several factors contributed to higher prices including record hot weather, dry conditions and record energy usage over an extended period (June to September). In addition, rail delivery issues impacted adequate coal supply, wind and hydro output was lower than expected and natural gas prices increased due to greater demand—partially due to geopolitical issues and world events. Collectively, these factors resulted in an increased cost of generation—approximately 35% more than expected—while energy consumption was greater than normal.
As the new year begins, EIA reports the cost of natural gas is gradually dropping, which is welcome news. Your electric cooperative is committed to delivering safe, affordable and reliable power to every consumer-member at the end of the line. To fulfill this mission, electric cooperatives recognize that all energy sources play a role in keeping the lights on. It is important for always-available resources such as natural gas and coal to be a part of the generation portfolio in the event renewable sources such as wind and solar do not generate when needed most.
As Oklahoma and our nation work toward a future that depends on more electricity to power our economy, the ability to keep the lights on in an affordable and reliable fashion is paramount. In the new year, your electric cooperative has a renewed commitment to serve you with excellence. Happy New Year!
To see more statistics on electric power plants, capacity, generation, fuel consumption, sales, prices and customers, visit the Energy Information Administration’s interactive data page.