Central Divisions Drive Increase in Electricity Generation



Electricity generation by division in the United States

The weekly electricity output and week-over-week change in production levels across different divisions in the United States are in the chart below. The Edison Electric Institute (or EEI) provides weekly electricity production data by division across the United States.

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Electricity generation rises

Out of nine divisions, electricity generation increased in five and decreased in four for the week ending March 27.

The Central Industrial division led the rise with 4.4%, or 0.5 million megawatt hours (or MWh), to 13.1 million MWh compared to the previous week’s 12.6 million MWh. Xcel Energy (XEL) and FirstEnergy (FE) operate in the region. Other gainers included divisions on the West Coast as well as the South Central division.

The West Central region saw a 2.1%, or 0.1 million MWh increase in electricity generation.

The Southeast division, home to Florida Power & Light (NEE) and Georgia Power (SO), saw generation fall by 1.1%, or 0.2 MWh, over the previous week.

Impact on coal

Historically, the Eastern United States was served by coal producers in the Appalachian and Illinois basins. The Western United States was served by the Powder River Basin (or PRB) territory. Since PRB coal is the cheapest, there might be some movement of PRB coal to Eastern states. However, the historic equation largely remains the same.

Thus, a rise in electricity generation in the East benefits Eastern coal producers (KOL) such as Alliance Resource Partners (ARLP). A rise in the West benefits PRB producers such as Cloud Peak Energy (CLD).

Weekly coal production data may give some idea about coal’s demand for electricity generation. However, demand for coal also depends on natural gas prices. In the next part, we’ll have a look at coal shipments, which mirror demand, in the United States for the week ending March 27.


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