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Electricity Monthly Update

With Data for December 2017  |  Release Date: Feb. 27, 2018  |  Next Release Date: Mar. 26, 2018

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Regional Wholesale Markets: December 2017

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

In December, wholesale electricity and natural gas prices were extremely high in the Northeast and Mid-Atlantic regions. Wholesale electricity prices set new 12-month highs in New England (ISONE), reaching $176/MWh on December 29; in New York City (NYISO), reaching $169/MWh on December 28; and in the Mid-Atlantic (PJM), reaching $102/MWh on December 29. These price levels were much higher than recorded at any other hub across the country, where all prices remained below $56/MWh during the month. Wholesale natural gas prices set new 12-month highs in New England (Algonquin), reaching $54/MMBtu on December 27; in New York City (Transco Z6 NY), reaching $18/MMBtu on December 28; in the Mid-Atlantic (Tetco M-3), reaching $19/MMBtu on December 28; and in the Midwest (Chicago Citygates), reaching $4/MMBtu on December 29. Wholesale natural gas at the Henry Hub in Louisiana, historically the proxy price point for the United States, ranged between $2.60-$3.00/MMBtu during the month.

In New England (ISONE), the extraordinarily high natural gas prices from December 27-31 led to a significant amount of oil-fired power generation. For long stretches, over 30% of the electricity generated within the ISO came from oil-fired generating units. For all of 2017, oil-fired generation made up just 0.7% of total generation in New England. Oil-fired generation has been a key part of ISONE’s Winter Reliability Solutions program, which ensures the reliability of the power grid in a pipeline-constrained and natural gas-fired generator dependent region. This program has been in place since the winter of 2013/2014, and part of the program helps compensate participants who acquire oil or LNG or who offer demand response resources. For the month of December 2017, nearly 550,000 barrels of oil were used as part of the program. This enabled operators to forego bidding up and purchasing some natural gas at very high prices.

Electricity system daily peak demand

Electric systems selected for daily peak demand

Electricity system daily peak demand levels were much higher in December than in November across all regions except California (CAISO). In the Northeast, a cold air mass arrived during the last few days of the month, putting temperatures in Boston at close to zero at night and highs that were just into the low teens from December 27-31. In New York City during this period, high temperatures were as much as 22 degrees Fahrenheit below average with low temperatures down to nine degrees in Central Park. Though elevated, these demand levels did not set any winter records in any of the regions identified during the month.

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