US POWER TRACKER: PJM forward power prices remain lower on year with gas prices down

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PJM Interconnection three-month forward power prices remained well below year-ago levels in December, trading as forward natural gas prices were down by as much as 70% year on year and the fuel accounted for about 42% of PJM's December power generation fuel mix. Spot gas prices were down over 80% year on year.

PJM West Hub on-peak forward power prices for January, February and March averaged $48.51/MWh in December trading, down from a three-month forward average of $99.64/MWh a year ago, according to Platts M2MS data.

Forward power at the hub for January averaged $53.45/MWh, down 55% year on year from an average of $118.33/MWh and down 15% month on month. Forward power for February averaged $50.69/MWh, down 52% from $106.45/MWh a year ago, and the forward package for March averaged $41.40/MWh, down 44% from $74.15/MWh last year.

Forward power prices at other liquid trading hubs like AEP Dayton and Northern Illinois were down by similar levels in December trading.

Forward gas prices were down even more sharply than power, with Transco Zone 6 Non-New York prices for January averaging $4.21/MMBtu, a nearly 70% decline year on year from $13.77/MMBtu and down 27% month on month. Forward gas for February averaged $3.91/MMBtu in December trading, down 70% from $12.87/MMBtu a year ago. And forward gas for March averaged $2.05/MMBtu, a 64% decline year on year from $5.65/MMBtu.

Power generation fuel mix

Coal-fired power accounted for 15.2% of PJM's December power generation fuel mix, up from 13.9% in November and down from 21.1% in December 2022, when gas prices were higher, and coal was more competitive.

Gas-fired power accounted for 42.3% of the fuel mix in December, up from 42.1% in November and 37.4% in December 2022.

Nuclear power accounted for 34.4% of the PJM generation mix in December, down from 35.2% in November and up from 33.0% in December 2022.

The remainder of PJM's generation mix was supplied by smaller volumes of hydropower, wind power, non-wind renewables and other resources, according to ISO data.

Spot power, gas price dynamics

PJM power demand in December was 5% higher than November, with peakload averaging 98,818 MW compared with an average of 94,553 MW a month earlier. PJM peakload averaged 106,179 MW in December 2022, when a severe winter storm impacted the region around the Christmas holiday.

Cooler December weather month on month helped increase power demand, with temperatures across the PJM footprint averaging 42.8 degrees Fahrenheit in December compared with an average of 45.9 F in November, according to CustomWeather data. The historical average temperature for December is 37.2 F.

Heating degree days averaged 21.7 compared with a historical December average of 27.8.

PJM West Hub on-peak day-ahead power prices averaged $33.22/MWh in December, down 62% year on year and down 20% month on month. Spot power prices at the hub averaged $87.43/MWh in December 2022.

Texas Eastern spot gas prices averaged $1.97/MMBtu in December, down 81% from an average of $10.43/MMBtu a year ago. Spot gas prices at the hub were down about 8% month on month from an average of $2.13/MMBtu in November.