1 1 (June 12, 2020)

handle is hein.crs/govdczw0001 and id is 1 raw text is: 

               Researh Sevice

COVID-19: Potential Impacts on the Electric

Power Sector

Updated June 12, 2020

The Coronavirus Disease 2019 (COVID-19) pandemic is impacting the electric power sector directly
(e.g., illness and fatalities among workers) and indirectly (e.g., reduced electricity sales). Most indirect
impacts to date have been caused by the economic effects of the pandemic. Long-term impacts are highly
uncertain and likely depend on the pandemic's ultimate toll on U.S. public health and the economy.
Potential impacts over the coming months include continued reduced electricity sales, increased electric
reliability risks, reduced utility bill payments, and delayed or reduced industry investment activity.

Reduced Electricity Demand

Electricity demand is determined mainly by weather patterns and economic activity. Economic activity in
recent months declined across the country, as governments took actions to slow the spread of COVID- 19.
These actions forced many businesses to close or curtail operations. Many U.S. states saw electricity
demand drop between 9% and 1300 in March and April 2020 relative to previous years, although some
(e.g., Florida) have not seen significant changes. With some states easing restrictions on businesses in
May 2020, electricity demand rebounded somewhat, but it remains lower than May 2019 in many areas.
Reduced electricity demand tends to lower wholesale electricity prices in the near term, as is also the case
for other energy commodities like gasoline. Prices in most wholesale electricity markets, which operate in
some parts of the country, declined between 22% and 37% between mid-February and mid-April.
Consumers may not see lower retail electricity prices, though, because of the timeline of electricity rate
regulation by states.
Reduced electricity demand could persist for months or longer. As of June 2020, the U.S. Energy
Information Administration (EIA) projects a 5.7% ( drop in annual electricity demand in 2020 compared to
2019. If demand and prices remain low for an extended period, some power plants may become
unprofitable. This could accelerate recent trends of changing conditions in the sector that affect
profitability. Additionally, utilities may delay or cancel construction of new power plants.

                                                                Congressional Research Service

Prpred For Meumbers and
Comrm ttees  of Conress  ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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