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Electricity Monthly Update

With Data for December 2016  |  Release Date: Feb. 24, 2017  |  Next Release Date: Mar. 24, 2017

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Regional Wholesale Markets: December 2016

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

Winter weather arrived across much of the country in December after a very warm November. As such, all hubs recorded both higher wholesale electricity and natural gas prices than last month. Wholesale electricity prices were highest in the Northeast, unsurprisingly, as the region is heavily reliant on natural gas-fired electric generation and natural gas prices spike during periods of cold weather as pipeline capacity into the region fills up. This results in much higher natural gas and electricity prices than found anywhere else in the country, though the price spikes can be for very short periods of time depending on changes in weather conditions. Wholesale electricity prices in New York City increased from $55/MWh on December 14 to $95/MWh on December 15 to $121/MWh on Friday, December 16 before falling back to $63/MWh on Monday, December 19, the next on-peak delivery day. In the Mid-Atlantic (PJM), prices moved from $41/MWh on December 14 to $61/MWh on December 15 but then back down to $51/MWh on December 16 and then lower in subsequent days. And in New England (ISONE), prices rose from $68/MWh on December 14 to $96/MWh, $97/MWh and $91/MWh on December 15, 16, 19 before falling to $73/MWh and $58/MWh on the 20th and 21st. Across the rest of the country, daily wholesale electricity prices remained below $54/MWh during the month.

Wholesale natural gas prices rocketed to the highest levels in the Northeast since early-2015, though for very brief periods of time. In New York City (Transco Z6 NY), prices surpassed $18/MMBtu for delivery on December 15, but remained below $7/MMBtu the rest of the month. In the Mid-Atlantic (Tetco M-3), prices nearly reached $9/MMBtu on December 15, but remained below $4/MMBtu the rest of the month. New England (Algonquin) was a different case, with prices remaining elevated for a longer period of time, exceeding $12/MMBtu on December 15 and staying above $10/MMBtu on five of eight delivery days between December 9-20. All other hubs in the country set new 12-month highs but remained below $4/MMBtu.

Electricity system daily peak demand

Electric systems selected for daily peak demand

Bonneville Power Administration set a new 12-month high daily peak demand on December 14 of 9,739 MW. This occurred during a long stretch of days where high temperatures were much below average, struggling to get above freezing across most of BPA's footprint. This cold weather in the Northwest contrasted with the rest of the country, which got warmer and warmer relative to average as you moved south and east. The warmer-than-normal temperatures kept daily peak loads away from the high end of each region's 12-month range, as the Mid-Atlantic (PJM) and Texas (ERCOT) where the only regions beside BPA to exceed 80% of its all-time peak demand. Progress Florida nearly set a new 12-month low daily peak demand during the month, as Florida enjoyed its fourth warmest December on record and temperatures in the 60's at night and low 80's during the day kept a lid on electricity demand.

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