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Electricity Monthly Update

With Data for January 2014  |  Release Date: Mar. 21, 2014  |  Next Release Date: Apr. 21, 2014

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Regional Wholesale Markets: January 2014

The United States has many regional wholesale electricity markets. Below we look at monthly and annual ranges of on-peak, daily wholesale prices at selected pricing locations and daily peak demand for selected electricity systems in the Nation. The range of daily prices and demand data is shown for the report month and for the year ending with the report month.

Prices and demand are shown for six Regional Transmission Operator (RTO) markets: ISO New England (ISO-NE), New York ISO (NYISO), PJM Interconnection (PJM), Midwest ISO (MISO), Electric Reliability Council of Texas (ERCOT), and two locations in the California ISO (CAISO). Also shown are wholesale prices at trading hubs in Louisiana (into Entergy), Southwest (Palo Verde) and Northwest (Mid-Columbia). In addition to the RTO systems, peak demand is also shown for the Southern Company, Progress Florida, Tucson Electric, and the Bonneville Power Authority (BPA). Refer to the map tabs for the locations of the electricity and natural gas pricing hubs and the electric systems for which peak demand ranges are shown.

In the second tab immediately below, we show monthly and annual ranges of on-peak, daily wholesale natural gas prices at selected pricing locations in the United States. The range of daily natural gas prices is shown for the same month and year as the electricity price range chart. Wholesale electricity prices are closely tied to wholesale natural gas prices in all but the center of the country. Therefore, one can often explain current wholesale electricity prices by looking at what is happening with natural gas prices.

Wholesale Prices

Selected wholesale electricity pricing locations

Daily wholesale electricity prices in January reached levels seldom, if ever, seen at locations in the Midwest and eastern U.S. In ISONE, prices reached nearly $438/MWh on January 23. On January 28, prices exceeded $518/MWh in NYISO, $683/MWh in the mid-Atlantic (PJM) and reached almost $306/MWh in the Midwest (MISO). The elevated price levels were also notable due to the sustained levels at which they remained; this was not an isolated one or two day event.

Wholesale electricity prices were much lower by comparison in the western U.S. Prices peaked at $70/MWh in Texas (ERCOT) and remained below $55/MWh in the Southwest (Palo Verde), California and the Northwest (Mid-C).

There were two major factors contributing to the high wholesale electricity price levels seen in January. The first is the extremely high electricity demand, particularly for non-summer months, that occurred. Several regions set new all-time winter peak demand records and experienced extended periods of well-above normal demand levels for this time of year.

The second factor contributing to high wholesale electricity prices were the extremely high natural gas prices in several parts of the country (see second tab). In the Northeast, natural gas prices reached $78/MMBtu in New England (Algonquin), $121/MMBtu in New York City (Transco Zone 6-New York), $92/MMBtu in the mid-Atlantic (Tetco M-3) and $33/MMBtu in the Midwest (Chicago Citygates). These prices were high enough to incent the use of petroleum for electric generation, something rarely seen in recent years due to the relatively high price of petroleum products in relation to natural gas.

Electricity System Daily Peak Demand

Electric systems selected for daily peak demand

In the mid-Atlantic region, PJM set a new all-time winter peak record of 141,312 MW on January 7 and experienced eight of the highest 10 winter demand peaks during the month. In New York State (NYISO), a new all-time winter peak record of 25,738 MW was also recorded on January 7, breaking the previous winter peak record set nearly 10 years ago in December 2004. In the Southeast, Southern Company reached peak demand levels of 39,130 MW on January 7, exceeding the previous winter peak record of 37,224 MW set in January 2010. And in the Midwest, MISO set a new all-time winter peak record with demand exceeding 109,000 MW.

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