Electrical energy usage over the business cycle

Causality from macroeconomic conditions to electrical usage overall and in the residential, commercial, industrial, and other sectors is examined. The paper shows that changes in macroeconomic conditions cause significant changes in electrical usage in the commercial and industrial sectors, and overall. In addition, the paper shows that causality occurs at business cycle frequencies and that there are asymmetries over the business cycle. An implication is that forecasts used to assess the probability of exceeding capacity constraints should incorporate forecasts of macroeconomic conditions, asymmetries over the cycle, and how the commercial and industrial sectors will respond to such changes. (C) 2004 Elsevier B.V. All rights reserved.