US POWER TRACKER: ISO New England power prices mixed in Feb, gas prices up 70%

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ISO New England wholesale power prices declined by around 40% on the year in February but increased by roughly 37% on the month with natural gas prices rising by 70% despite lower power demand, which was down by about 1% from January.

ISO-NE Internal Hub on-peak day-ahead power prices averaged $72.41/MWh in February, down by about 41% on the year and up almost 37% on the month, according to ISO data. The maximum on-peak day-ahead daily average price was $242.76/MWh on Feb. 3 amid an extreme cold snap. Real-time on-peak power prices at the hub averaged $53.12/MWh in February, down almost 53% on the year and up by around 7% on the month.

Boston Hub on-peak day-head power prices averaged $73.23/MWh in February, a decline of about 40% on the year and an increase of around 37% on the month. The highest daily average on-peak day-ahead price reached $241.42/MWh on Feb. 3. On-peak real-time power prices averaged $53.72/MWh, down by around 53% on the year and up by about 37% on the month.

The Connecticut Zone on-peak day-ahead power price averaged $70.09/MWh in February, a roughly 41% decline on the year and approximately 36% higher on the month. Like the other regions, the highest daily average day-ahead on-peak power price of $239.61/MWh was reached on Feb. 3.

Algonquin city-gate natural gas prices averaged $8.01/MMBtu in February, 45% lower on the year and almost 70% higher than the January average of $4.73/MMBtu, according to S&P Global Commodity Insights data. The daily average gas price reached a high of $66.37/MMBtu on Feb. 3.

ISO-NE power demand declined on the month in February with peakload averaging 15,865 MW compared with 16,003 MW in January. Average peakload declined by 4% on the year.

"Power demand is projected to rise by roughly 5% in 2023 although the risk of a recession presents the potential for a downward revision to this outlook," S&P Global power market analysts said in a recent research note.

Temperatures across ISO-NE territory have been above average in 2023. The February average temperature was 33.6 F compared to a normal average temperature of 30.3 F, according to CustomWeather data.

The January average temperature was 36.3 F compared with a normal average temperature of 28.8 F. Heating degree days increased with the cooler weather, rising from 28.1 in January to 30.9 in February.

Power generation fuel mix

Gas-fired power accounted for 46% of the ISO-NE fuel mix in February, down from 48% in January and 46.9% in February 2022, according to ISO data.

Nuclear power supplied 28.5% of the region's power in February, down from 29.3 in January and 29.1 in February 2022.

Hydropower accounted for 10.2% of the generation mix in February, down from 11.9% in January and up from 7.3% in February 2022.

Solar power accounted for 2.8% of the February fuel mix, up from 1.4% in January and 2.1% in February 2022. Wind power supplied 3.8% of the fuel mix in February, up from 3.6% in January and down from 5.3% in February 2022.

Forward power, gas prices

Mass Hub on-peak forward power prices for March averaged $57.27/MWh in February trading, down about 26% on the month and 35% on the year, according to Platts M2MS data. Forward power for April averaged $43.20/MWh, a decline of 20% on the month and about 21% on the year, and forward power prices for May averaged $35.59/MWh during February trading, down 15% on the month and 22% on the year.

Forward Algonquin city-gate gas prices for March averaged $5.08/MMBtu in February trading, down about 35% on the month and around 48% on the year. Forward gas prices for April averaged $3.09/MMBtu, down about 25% on the month and 37% on the year, and forward gas for May averaged $2.46/MMBtu, a decline of about 14% on the month and 36% on the year.

"With gas markets rebalancing and production outpacing demand, delivered natural gas prices in New England are projected to average around $4.03/MMBtu in 2023, down from over $9/MMBtu in 2022," S&P Global analysts said.

"As a result, we project on-peak power prices to continue to moderate throughout the year with an average of $48/MWh in 2023," according to the research note.