Rebound in Carolinas electricity consumption among the strongest nationwide

As the national economy rebounded last year from Covid-19 slowdowns, the Carolinas were among states that saw the strongest rebound in electricity demand, says a new report on energy consumption trends.

The report is compiled by CommercialCafé, an organization that focuses on real estate trends. It bears the unwieldly title of “U.S. Energy Production and Consumption in 2021: On Its Way to Recovery, Commercial Usage Grows 3% Y-o-Y.”

It undertook the energy study to see which markets appear to be recovering more quickly after the worst of the pandemic shutdowns in 2020. It uses U.S. Energy Information Administration data to track how power consumption changed in the residential, commercial and industrial sectors for each state from one year to the next.

“Virginia power usage came back with a vengeance in 2021, not only making up for lost ground but also exceeding its pre-pandemic high,” the report says, ranking that state first with a 6% year-over-year increase to 124 million megawatt-hours used. “Not far behind, total energy consumption in North Carolina jumped 5% to total 136 million (megawatt-hours) in 2021, bolstered by steady numbers across all three sectors.”

Losing out

The report notes that three states saw energy consumption fall in 2021 from the year before. They are California — which saw a 2% drop — Arizona and Florida, each with consumption falling 1%.

North Carolina ranked in the top five in each of the three customer sectors. It finished in fourth place for its increase in industrial demand (up 8% from 2020), fourth for commercial power (up 4%) and fifth for residential (up 4%).

South Carolina saw particularly strong industrial demand, jumping 9% in 2021 and ranking second in that sector among the 50 states. That was South Carolina’s only top-10 ranking in the three sectors. But on the strength of that showing, it tied with North Carolina and three other states for third in overall demand growth, with usage increasing 5% from 2020.

The report has its limitations. The EIA data, for instance, does not account for the impact of weather — an unseasonably hot summer or unusually cold winter — on power use. Nor does it account for population growth, which would be an important component in the Carolinas in the increase in residential use.

But the report is concerned mainly with what is happening in the commercial and industrial sectors.

Duke's experience
Bill Norton, a spokesman for Duke Energy Corp. (NYSE: DUK) in North Carolina, says the figures broadly reflect the experience of Duke Energy Carolinas and Duke Energy Progress.

“We are seeing load growth across the Carolinas … (and) experienced growth in the each of the residential, commercial and industrial sectors in 2021,” he says. “Commercial and industrial are not quite back to pre-COVID levels due to labor constraints and ongoing effects … but North Carolina clearly continues to attract both residents and jobs.”

On performance in those sectors, Norton says, “We anticipate North Carolina’s clean energy law will only make the state more attractive for commercial and industrial companies considering relocation.”

The Carolinas, the heart of Duke’s five-state electric utility franchise, were the best-performing states in which the company has electric utilities. Kentucky, in which Duke has a very small presence, also made the 5% overall increase mark. Ohio finished with a 4% increase overall, just good enough to tie for ninth place, and Indiana finished outside of the top 10 with a 3% overall increase in electricity usage that just matched the national average.

Duke also has operations in Florida, one of the few states with an overall decrease.

'Not obsolete'

The report finds that the commercial and industrial sectors saw encouraging signs in 2021, but neither has reached its pre-pandemic power-consumption level.

It attempts to tease out the impacts of remote working.

“It’s important to note that remote working hasn’t made offices obsolete,” the report says. “In fact, news of big companies investing in prime real estate or renewing or expanding their leases has continued to pour in. However, the transition to remote work has shifted expectations regarding the future of workspaces — not the least of which is energy usage optimization.”

For the commercial sector, which includes offices and small businesses, it says “annual energy sales … grew by 37 million MWH — the highest year-over-year increase across all three sectors.”

The industrial sector saw a sharp drop early in 2021, nearing the lowest consumption the sector saw in 2020, the report says. But it saw uninterrupted growth that spring and summer.

“Notably, consumption levels in the third quarter were 4% to 6% higher than in the previous year and just marginally lower compared to the same period in 2019” before the pandemic, the report says.

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