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Electricity Monthly Update

With Data for July 2021 Release Date: September 24, 2021 Next Release Date: October 26, 2021

Regional Wholesale Markets: July 2021

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, 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

July wholesale electricity prices were extremely high across the western United States, reflecting the extreme heat wave that blanketed the region during the month. Prices reached $595/MWh in the Northwest (Mid-C), a new 12-month high, and $178/MWh in the Southwest (Palo Verde) on July 30. Prices reached $133/MWh in Southern California (CAISO) and $130/MWh in Northern California (CAISO) on July 29 and $146/MWh in Texas (ERCOT) on July 27. Temperatures records were shattered across the West, with Death Valley hitting a new all-time high of 130 degrees on July 9 (and possibly the hottest reliably recorded temperature ever on Earth), and triple-digit temperatures spreading from Southern California all the way into Canada. The western US is also experiencing severe drought which has resulted in considerably diminished hydroelectric output. This dearth of hydroelectric output places strain on other sources of generation, mainly natural gas, to meet this gap in generation, leading to higher natural gas and electricity prices. Weather was much cooler in the eastern US relative to normal and wholesale prices reflected this difference. Daily high prices peaked between $58-$68/MWh in New England (ISONE), New York State (NYISO), the Mid-Atlantic (PJM), and the Midwest (MISO) during the month. Wholesale natural gas prices during the month were also the highest in the nation at several western trading hubs. Prices hit $6.98/MMBtu at SoCal Border in Southern California on July 29 and $5.73/MMBtu at PG&E Citygate in Northern California on July 27. At the Henry Hub in Louisiana, the traditional proxy for US natural gas prices, prices traded between $3.56-$4.15/MMBtu during the month, up from the $2.91-$3.75/MMBtu range in June.

Electricity system daily peak demand

Electricity system daily peak demand set or was close to 12-month highs on several selected electricity systems in July. In the Midwest, MISO set a new 12-month daily peak demand high on July 28 of 113.9 GW. In the Southeast, Southern Company set a new 12-month high of 45.1 GW on July 29. In the Mid-Atlantic, PJM demand was less than 1% off its 12-month highs and Progress Florida and ERCOT (Texas) were both within 2% of their respective 12-month highs. These high demand levels were a result of very hot weather in some parts of the country. On the West Coast, California, Oregon, Washington, and Nevada all experienced their hottest July on record as measured by average temperatures. Temperatures in Florida and across the Mid-Atlantic and Midwest were also well-above average.