Regional Wholesale Markets: February 2012

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 U.S. 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 Electricity Prices

The only day in February when the wholesale electricity on-peak daily spot prices reported above rose above $50/MWh was in New York City on February 13, 2012. That day was also the only day in February that any of the reported wholesale natural gas prices were above $5/MMBtu. This occurred in New York City and Boston (see the second tab).

These prices reflect cold weather demand and natural gas pipeline constraints into Northeast markets. Otherwise, daily wholesale electricity prices ranged between $29 and $42/MWh in the Northeast.

Elsewhere wholesale electricity prices stayed in the low end of the annual range except for the Northwest, which typically sees its lowest prices during the spring hydroelectric season. Annual low daily wholesale prices were set in the New England, New York, Mid-Atlantic and Southwest regions and in Louisiana, Texas and California due to unseasonably warm weather and low wholesale natural gas prices.

Wholesale natural gas prices stayed in the low end of the annual range outside of the Northeast. Annual low daily wholesale natural gas prices were set in all regions, except for the Mid-Atlantic.

Electricity System Daily Peak Demand

The monthly range of daily peak-hour demand as a percentage of all-time peak demand for February 2012 compared to the annual range varied a lot from region to region. This reflects the unusually unseasonable weather this winter. Peak demand in the Northeast, New York, Midwest, Texas, Tucson and California (CAISO) were low. And the Midwest, Texas and Tucson got close to the lowest demand during the past year. Florida (Progress Florida) saw peak demand vary in the month from almost the lowest to almost the highest for the year. The same was true to a lesser extent on the high side in the Southeast (Southern Company). The Northwest (Bonneville Power Administration) is the only place that seemed to have a normal winter range of peak demand. That is, high peak demand but not the highest of the year as in summer and not as low as the spring and fall low demand seasons.