How Subdued Electricity Generation Could Impact US Coal Producers

The EEI (Edison Electric Institute) publishes electricity generation data weekly. The current report for the week ending September 2, 2016, shows that US electricity generation decreased to 84.3 million MWh (megawatt-hours) from 86.9 million MWh the previous week. Moreover, electricity generation has been consistently on the decline for the past three weeks. The week’s electricity generation was meanwhile lower than the 86.8 million MWh reported during the same week in 2015. More than 90% of the coal produced in the United States is used for the generation of electricity. This means that the power utility segment is coal’s largest end-user. As a result, coal and utility investors watch electricity generation trends. Because electricity storage is expensive, most produced electricity is consumed right away. As a result, electricity generation mirrors consumption.

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