US POWER TRACKER: NYISO summer forward power prices 53% to 64% lower on year

New York Independent System Operator on-peak forward Zone J New York City power prices indicate wholesale power prices will be significantly lower than in summer 2022, mainly because of lower natural gas prices, with the fuel accounting for roughly 44% of the generation fuel mix in May.

The average Zone J summer strip for June, July, and August averaged $55.97/MWh in May trading, compared with an average of $123.79/MWh for the corresponding year-ago period, with forward gas prices for summer 2023 down between 73% and 78%.

New York state regulators forecast that the state will have 41,148 MW of power generation capacity available to meet forecast power demand of 32,048 MW this summer, which constitutes a 28.4% installed reserve margin, and that power prices will be 30%-40% lower than last summer, the Public Service Commission said in May.

NYISO Zone J on-peak forward power prices for June averaged $42.96/MWh in May trading, down 5.2% on the month and about 58% on the year, according to Platts M2MS data. Forward power for July averaged $66.89/MWh, down about 12% on the month and about 53% on the year, while forward power for August averaged $58.04/MWh, a decline of roughly 6% on the month and about 55% on the year. Zone J 2022 summer power forwards averaged $123.79/MWh.

NYISO Zone G Hudson Valley on-peak forward power prices for June averaged $40.22/MWh in May trading, down 5.3% on the month and nearly 59% on the year. Forward power for July averaged $62.46/MWh, a decline of about 12% on the month and about 54% on the year, and forward power for August averaged $52.55/MWh, down nearly 6% on the month and about 56% on the year.

Zone A Western New York forward power prices for June averaged $27.43/MWh, a decline of about 2% on the month and about 4% on the year. Forward power for July averaged $44.26/MWh, down about 7% on the month and nearly 64% on the year, and forward prices for August averaged $39.51/MWh, down around 12% on the month and about 62% on the year.

Transco Zone 6 forward gas prices also dropped considerably from last year, with the June contract averaging $1.61/MMBtu in May trading, down around 16% on the month and about 78% on the year. Forward gas for July averaged $2.02/MMBtu, also down about 16% on the month and about 74% on the year, and forward gas prices for August averaged $2.01/MMBtu, down about 16% on the month and around 73% on the year. Summer 2022 gas forward prices averaged $7.64/MMBtu for the corresponding months.

Power generation fuel mix

Dual fuel units that primarily run on gas with a backup fuel like oil accounted for 23.7% of the May power generation fuel mix, down from 24.4% in April and 25.8% in May 2022, according to ISO data.

Gas-fired power accounted for 20.2% of the May fuel mix, down from 21.2% in April and 24.3% in May 2022. Nuclear power accounted for 26.1% of the May generation mix, up from 20.9% in April and 23.5% in May 2022. Hydropower supplied 24.4% of the May fuel mix, down from 26.5% in April but up from 21.5% in May 2022. Wind power accounted for 3.5% of the generation mix in May, down from 5.2% in April, but up from 3% in May 2022.

Other renewables supplied 2.2% of the May fuel mix, up from 1.8% in April and 1.9% in May 2022.

Spot power, gas prices

NYISO Zone G on-peak day-ahead power prices averaged $26.47/MWh in May, down nearly 18% on the month and about 69% on the year from $84.56/MWh in May 2022.

Zone J on-peak day-ahead power prices were down by similar levels in May to average $27.03/MWh, a decline of roughly 18% on the month and nearly 69% on the year.

Zone A on-peak day-ahead power prices averaged $18.01/MWh in May, down nearly 11% on the month and down about 53% on the year from $38.82/MWh in May 2022.

Transco Zone 6 on-peak gas prices averaged $1.41/MMBtu in May, down about 17% on the month and almost 81% on the year from an average of $7.39/MMBtu in May 2022.

NYISO spot power prices were down on the month in May despite a slight increase in power demand. Peakload averaged 16,744 MW compared with 16,513 MW in April, a 1.4% increase, according to ISO data. Peakload was down 6.1% on the year.

Temperatures across the NYISO footprint were close to historical levels in May with an average temperature of 60.6 degrees Fahrenheit compared with the historical average of 61.1 F, according to CustomWeather data.

The region still saw some electric heating demand in May, with heating degree days averaging 5.1 compared to an average of 10.8 in April. Cooling degree days also started to increase, averaging 0.85 in May compared with 0.71 in April.