Consumption by sector
Depending on the end users, electricity sales can be classified into four broad sectors of electricity: residential, commercial, industrial, and transportation. Analyzing trends in electricity consumption by the end user perspective helps investors identify power companies that have exposure to sectors showing growth.
Electricity sales in October
The commercial and industrial sectors’ electricity sales increased by 1.23% and 1.04%, respectively, in October compared to last year. During the same period, electricity sales in the residential sector declined by 1.1%
The industrial sector’s electricity consumption has been strong this year, registering positive year-over-year electricity consumption growth for the last consecutive seven months. Entergy Corporation (ETR) has major exposure to electricity sales in the industrial sector, which accounts for 38.7% of Entergy’s total electricity sales.
Trends in residential and commercial sectors
In contrast, the residential sector’s electricity demand has lowered in recent months. Year-over-year (or YoY) residential electricity consumption has declined in the last five months. In the residential space, Public Service Enterprise Group (PEG) and NextEra Energy (NEE) have the highest proportion of their total electricity sales among all of the power companies operating in the US. Both companies are part of the Utilities Select Sector SPDR (XLU).
On the other hand, the commercial sector saw an off take in electricity consumption in recent months after posting a YoY decline in consumption in July and August. Duke Energy (DUK) sells the highest commercial electricity in the US.