Wholesale electricity markets are overseen by the Federal Energy  Regulatory Commission (FERC). The Electricity Generation Mix Has Shifted Toward More Natural Gas, Wind, and Solar Sources, and Growth in Electricity Consumption Has Slowed

According to our analysis of SNL data, the mix of energy sources used to  generate electricity has generally shifted to include more natural gas,  wind, and solar, but less coal and nuclear, from 2001 through 2013,  though the extent of these changes varied by region. For example, California and  Arizona accounted for over half of electricity generation from large solar  power plants in 2013. This decreasing growth trend  continued in the 2000s, with electricity retail sales growing by over 1  percent per year from 2001 through 2007, and fluctuating, but remaining  largely flat from that time through 2014. Changes in the uses of electricity: Consumer uses of electricity  have changed over the last decades, affecting the nature of electricity  consumption. Some regions have recently experienced challenges in  maintaining the delivery of natural gas supplies to power plants. For  example, in January 2014, a severe cold weather event know as a  “polar vortex” affected much of the central and eastern United States,  causing significant outages at plants using various fuel sources and  leading to higher than normal demand for natural gas for both  electricity generation and home heating. However, challenges  delivering fuel to natural-gas-fueled power plants posed significant  concerns and resulted in outages at some natural-gas-fueled power  plants. System operators took various steps to limit the effect of this  event, including relying on power plants that utilize other fuel sources  that were more readily available at that time, such as coal and oil,  issuing public appeals for conservation, utilizing demand-response  resources, and implementing certain emergency procedures. In this regard, representatives of Midcontinent Independent System  Operator said they have been able to reliably accommodate larger  amounts of wind generation without major operational challenges or the  need for significant additional ancillary services because the large size of  their grid and its extensive connections to neighboring grids provide a  broad base of power plants that system operators can use to balance  variations in the output of wind power plants.literature we reviewed and representatives of the largest utility in Hawaii,  while that state has been able to reliably integrate high levels of wind and  solar, its isolated island grids means it has no neighboring grids to turn to  for balancing variations in the output of wind and solar electricity  generation. Changes in Generation and Consumption Influence Electricity Prices, but the Net Effect Is Unclear

Changes in generation and consumption, together with associated  actions system operators have taken to maintain reliability, have  influenced consumer electricity prices in complex, interrelated, and  sometimes contradictory ways, and the net effect of these changes on  consumer prices is unclear, based on our review of literature and  discussions with stakeholders. expected to contribute to lower prices.regionally and over time based on, among other things, what  alternative power plants exist in a region, the cost of those  alternatives, and the amount of federal and state financial support for  wind and solar development. Taken all together, the addition  of wind and solar sources could have contributed to higher or lower  consumer electricity prices at different times and in different regions. The agencies provided technical comments on early or final  drafts, which we incorporated as appropriate. Our objectives were  to describe what is known about (1) how electricity generation and  consumption have changed since 2001, and (2) the implications of these  changes on efforts to maintain reliability, and on electricity prices. To identify the implications of changes, we reviewed literature and  interviewed stakeholders. We selected  stakeholders to represent different perspectives and experiences  regarding changes in the industry, and to maintain balance with respect to  sources of electricity and stakeholders’ roles in the market. Energy Policy: Information on Federal and Other Factors Influencing U.S.  Energy Production and Consumption from 2000 through 2013.
Why GAO Did This Study

Electricity in the United States has traditionally been generated largely from coal, natural gas, nuclear, and hydropower energy sources. More recently, various federal and state policies, tax incentives, and research and development efforts have supported the use of renewable energy sources such as wind, solar, and geothermal. In addition, consumption of electricity has been affected by federal efforts to improve energy efficiency, changes in the economy, and other factors.
GAO was asked to provide information on changes in the electricity industry. This report examines what is known about (1) how electricity generation and consumption have changed since 2001 and (2) the implications of these changes on efforts to maintain reliability, and on electricity prices.
GAO analyzed data on electricity generation, consumption, and prices and reviewed literature. GAO also interviewed 21 stakeholders, including government officials, and industry representatives, selected to represent different perspectives and experiences regarding changes in the industry.
GAO is not making recommendations in this report. The Department of Energy and Federal Energy Regulatory Commission reviewed a draft of this report and provided technical comments that GAO incorporated as appropriate.

What GAO Found

The mix of energy sources for electricity generation has changed, and the growth in electricity consumption has slowed. As shown in the figure below, from 2001 through 2013, natural gas, wind, and solar became larger portions of the nation's electricity generation, and the share of coal has declined. These changes have varied by region. For example, the majority of wind and solar electricity generation is concentrated in a few states—in 2013, California and Arizona accounted for over half of electricity generated at solar power plants. Regarding consumption, national retail sales of electricity grew by over 1 percent per year from 2001 through 2007 and remained largely flat from that time through 2014.
The literature GAO reviewed and stakeholders GAO interviewed identified the following implications of these changes:
Maintaining Reliability : System operators, such as utility companies, have taken additional actions to reliably provide electricity to consumers. For example, some regions have experienced challenges in maintaining the delivery of natural gas supplies to power plants. In particular, severe cold weather in the central and eastern U.S. in 2014 led to higher than normal demand for gas for home heating and to generate electricity. Challenges delivering fuel to natural-gas-fueled power plants resulted in outages at some plants. System operators took various steps to limit the effect of this event, including relying on power plants that utilize other fuel sources that were more readily available at the time, such as coal and oil-fueled power plants, and implementing certain emergency procedures.
Prices : Increased gas-fueled generation has influenced electricity prices, with wholesale electricity prices and gas prices generally fluctuating in tandem over the past decade. The effect of the increased use of wind and solar sources on consumer electricity prices depends on specific circumstances. Among other things, it depends on the relative cost of wind and solar compared with other sources, as well as the amount of federal and state financial support for wind and solar development that can offset some of the amount that consumers might otherwise pay. Taken together, the addition of wind and solar sources could have contributed to higher or lower consumer electricity prices at different times and in different regions.