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November 18, 2013

Electricity in the Mid-Atlantic region is predominantly fueled by coal and nuclear sources

graph of mid-atlantic electricity generation, as explained in the article text
Source: U.S. Energy Information Administration, Electricity Monthly Update
Note: Other refers to electricity generated from the non-biogenic portion of municipal solid waste, other non-renewable waste fuels, hydroelectric pumped storage, other energy storage, and other sources.

In the Mid-Atlantic region, the decline in natural gas prices led to an increase in the use of natural gas for power generation, but the region remains mostly fueled by coal and nuclear sources of electricity.

The Mid-Atlantic electric region in this analysis is represented by the PJM Interconnection's electric system, the largest single electric system in the nation in terms of customers served. The fuel mix in this region has remained fairly consistent, compared to the larger shifts seen in other regions.

Natural gas power generation increased because of low natural gas prices in 2012 and 2013 (especially in states such as Ohio and Pennsylvania), but the availability of cheap coal from the Illinois Basin has kept coal-fired units producing nearly half of the output in PJM's system, especially in the western portion (Indiana and Illinois).

Although natural gas-fired units do not make up a majority of the generation units in this region, these units often set the wholesale electricity price. This is because in the PJM market, the electricity price is determined by the last unit selected (the marginal unit) to run at a given time, based on fuel and other operating costs. Because natural gas often fuels the last unit selected, the wholesale power price in the PJM system generally moves with the natural gas price on any given day (see graph below).

graph of mid-atlantic spot electricity and natural gas prices, as explained in the article text
Source: U.S. Energy Information Administration based on SNL Energy
Note: Data are the rolling seven-day average. The electricity price is PJM West, and the natural gas price is the TETCO M-3 zone.

Principal contributor: M. Tyson Brown