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Electricity Monthly Update

With Data for September 2020 Release Date: November 24, 2020 Next Release Date: December 24, 2020

Regional Wholesale Markets: September 2020

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

September wholesale electricity prices were bifurcated with prices lower in the east and higher in the west as a result of differing weather conditions. In the east, mild temperatures resulted in daily peak prices remaining below $40/MWh in New England (ISONE), New York City (NYISO), the Mid-Atlantic (PJM), the Midwest (MISO), Louisiana (into Entergy), and Texas (ERCOT). Extended record heat in the west pushed prices up to $120/MWh in the Southwest (Palo Verde), $151/MWh in Southern California (CAISO), $81/MWh in Northern California, and $105/MWh in the Northwest (Mid-C). Wholesale natural gas prices followed a somewhat similar pattern to electricity prices, with higher prices in the west driven by natural gas demand at power plants meeting higher electricity demand. Prices reached a nationwide high of $6.22/MMBtu in Southern California (SoCal Border), a 52-week locational high of $4.00/MMBtu in Northern California (PG&E Citygate), and $3.05/MMBtu in the Northwest (Sumas). The highest price east of the Mississippi River reached only $2.55/MMBtu in New England (ISONE). New 52-week locational low prices were set during the month at $0.95/MMBtu in New England (Algonquin) and $1.33/MMBtu in Louisiana at Henry Hub. New 12-month lows were missed by only a few pennies in the Midwest (Chicago Citygates) and in Texas (Houston Ship Channel).

Electricity system daily peak demand

Electricity system peak demand levels trended steadily down throughout September as temperatures cooled in all regions except California (CAISO) and Progress Florida, were temperatures remained summerlike and daily peak demand remained strong. In California, the 46,184 MW daily peak on September 8 was just 458 MW below CAISO’s 12-month daily peak high. In Progress Florida, the 11,431 MW daily peak on September 3 was just 124 MW below its 12-month daily peak high. In the Bonneville Power Administration, September 26’s daily peak demand high of 5,497 MW was a 12-month low for the region. As demand falls towards the end of the month and continuing into October, system operators begin the fall shoulder maintenance season in earnest as they prepare for the upcoming winter season.