The increase in natural gas prices will drive the cost of electricity 4% higher this summer compared to last year, according to US EIA.
The Henry Hub spot price for natural gas fell to $3.44 per million BTUs, down 68 cents from March, however, EIA says the spot price will average nearly $4.20/MMBtu in the third quarter of 2025.
“Despite rising seasonal demand for natural gas heading into summer, our forecast for the 3Q25 Henry Hub price is almost double the price from a year earlier and is contributing to our expectation of less natural gas use in the electric power sector on average this year compared with last year.”
EIA forecasts electric generation from gas-fired power plants will decline by 3% in 2025.
“Less generation from natural gas contributes to a 6% increase in generation from coal.
“U.S. solar generation continues to provide the largest increases in electricity generation in our forecast, increasing by 34% in 2025 and 18% in 2026.”
Electricity
“For electricity, we expect the average U.S. electricity bill will be about 4% more this summer (June, July, and August) compared with last summer.
“The increase is the result of electricity prices that we expect will be 4% higher this summer, largely reflecting an increase in natural gas prices.”
Coal
“With U.S. coal-fired power plants generating more electricity this year, we now expect coal production will decline by less than we previously expected.
“We forecast U.S. coal production will total 506 million short tons in 2025, nearly the same amount of coal that was produced last year.
“Last month, we expected U.S. coal production to fall by 4% this year compared with last year.”
Oil
US EIA expects crude oil prices to fall over much of the forecast period from $68/barrel in April to averaging $62/barrel in the second half of 2025 and falling to $59/barrel next year.
“We expect gasoline prices across the United States will average $3.14 per gallon over 2Q25 and 3Q25, down 9% from the same period last year.”
Trade Policy Assumptions
“The U.S. macroeconomic outlook we use in the Short-Term Energy Outlook (STEO) is based on S&P Global’s macroeconomic model.
“ S&P Global’s most recent model reflects the tariffs announced on April 2, but the model was finalized prior to the 90-day temporary suspension of tariffs granted to certain countries.
“As a result, our macroeconomic forecast assumes significantly lower tariffs on China’s products than are currently in place and significantly higher tariffs on countries subject to the 90-day temporary suspension.
“These differences in tariff rates likely have offsetting effects on the macroeconomic forecast.”
Click Here for the US EIA’s Short-Term Energy Outlook.
Related Articles This Week:
-- Rise Of The Machines: Senate, House Members Express Concern That Demand For Power To Run Computers Is Impacting The Price And Availability Of Electricity For ‘Ordinary People’ [PaEN]
-- US EIA: US Natural Gas Prices Double Last Year Due To LNG Exports, Demand Driving Electricity Prices Higher This Summer [PaEN]
-- North American Electric Reliability Corp.: Record Load Growth From Data Centers, High Temperatures Expected To Strain Electric Grid This Summer [PaEN]
NewsClips:
-- Post-Gazette - Anya Litvak: NRG Buys 5 PA Gas Power Plants To Meet ‘Supercycle’ Of Demand By Data Centers; Refitted To Run As Baseload Plants
-- PennLive: PPL Customers Will See Another Rate Increase June 1 - 16% [Due To Regional Electric Market Issues]
-- Financial Times: Constellation Energy, Other Companies Abandon Almost Half the Projects In $5 Billion Texas Program To Fund Natural Gas Power Plants Due To Costs, Supply Chain Delays [Sen. Yaw Wants A Program Like This In PA]
[Posted: May 14, 2025] PA Environment Digest
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