Why electricity demand is tepid in southern US regions

The United States is divided into nine divisions. The Edison Electric Institute (or EEI) provides weekly electricity production data for these divisions. The weekly electricity output and week-over-week change in production levels can be seen in the chart below.

For the week ended December 5, 2014, the Central Industrial and Pacific Northwest divisions saw double-digit growth in week-over-week electricity output levels. Electricity output growth in the Pacific Northwest and Central Industrial were 24% and 10%, respectively, over the previous week’s production levels.

PG&E Corporation (PCG) and Ameren Corporation (AEE) are key power companies in the Pacific and central regions of the United States. Both companies are part of the Utilities Select Sector Standard & Poors depositary receipt (or SPDR) (XLU).

All US regions saw rises in electricity production levels over the last week except the Southeast region. Electricity output in the Southeast region dropped by 3% for the week compared to output levels of the previous week.

The southern region of the United States experiences warmer winters compared to the rest of the country and requires less electricity to warm their homes and offices. So the region’s lower demand growth in winters relative to other regions of the United States is understandable.

Power companies such as NextEra Energy (NEE) and Duke Energy (DUK) operate in the Southeast region of the United States.