The Sconi

The U.S. Energy Information Administration (EIA) forecasts a long, dark winter with limited natural gas production and rising demand for natural gas, setting the scene for rising energy prices across much of the country, including Wisconsin.

"We expect higher wholesale electricity prices this winter in every region of the country,” EIA officials posted on Twitter. “Our forecast for wholesale winter electricity prices ranges from 31% higher in the Southwest to more than 60% higher in the mid-Atlantic and Central regions." 

Across the central region and in Wisconsin, EIA reports the price jump is expected to be even steeper, with average electricity prices pegged to jump by as much as 62% this winter compared to the same time last year. Overall, there are 11 Short-Term Energy Outlook (STEO) electricity supply regions that the EIA analyzes on a monthly basis, with this month’s data showing an average jump of 50.6% for on-peak wholesale electricity prices across the country.

Deeper analysis of the data finds that mid-Atlantic and central region states that rely on the Pennsylvania, New Jersey and Maryland (PJM) and the Southwest Power Pool (SPP) electricity supply chains will see the largest price increases over the next several months compared to 2021.

In the end, EIA officials forecast the New England region is likely to see the highest wholesale prices this winter, averaging as high as $200 per megawatt hour in January, or greater than three times higher than peak rates across other areas of the country.

All the uncertainty is also expected to translate into higher retail electricity prices this winter, with EIA forecasting that residential electricity prices will average 14.5 cents per kilowatt hour from December through February, a 6% increase over last winter. 

At the same time, price increases are expected to range from almost no change in the West North Central region to 18% in the New England region.

Going into 2023, EIA officials are painting a picture that outlines limited natural gas production coming from the Permian Basin, as a lack of pipeline capacity continues to hamper the process. This along with higher winter natural gas demand and rising liquid natural gas (LNG) exports are contributing to the expected higher prices.

While the smallest winter-over-winter price increases are expected to be on the West Coast, the spike is still pegged to be significant with the California ISO electricity supply chain region experiencing prices as high as 33% greater compared to the previous winter.