US POWER TRACKER: NYISO power prices down on year, stronger heading into winter

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New York Independent System Operator on-peak three-month forward power prices have been trading around $55.39/MWh, compared with an average of $123.09/MWh for the same period last year and on-peak Zone J New York City power prices are forecast to average $48.14/MWh for the fourth quarter of 2023, according to S&P Global Commodity Insights data.

NYISO Zone J on-peak forward power prices for October averaged $34.45/MWh in September trading, down about 64% from $94.56/MWh a year ago, according to Platts M2MS data. Forward power at the hub for November averaged $49.40/MWh, down 58% on year, and forward power for December averaged $82.34/MWh, down 47% on year. Power forwards were down slightly on month.

NYISO Zone G Hudson Valley on-peak forward power prices followed a similar trend, with monthly averages down 63% for October and 59% for November. However, forward power for December averaged $80.16/MWh, a nearly 34% increase on year from $59.85/MWh in December 2022.

Transco Zone 6 forward natural gas prices for October averaged $1.21/MMBtu in September trading, down about 81% from an average of $6.36/MMBtu a year ago. Forward gas prices for November were down 69% on year, and forward gas for December was down 55% on year.

NYISO Zone J gas prices at the Iroquois Zone 2 pricing point are forecast to average $3.24/MMBtu in Q4, with December averaging $5.17/MMBtu, according to S&P Global data.

Power generation fuel mix

Generation was relatively flat in September, with a small decrease in gas generation accounting for much of the decrease in demand, S&P Global power market analysts said in a recent research note.

Gas-fired power accounted for 24.7% of the NYISO fuel mix in September, up from 24.1% in August and down from 28.7% in in September 2022, according to ISO data.

Dual fuel resources that mostly run on gas with a backup fuel like oil accounted for 29.6% of the September fuel mix, down from 31.1% in August and up from 24.8% a year ago.

Nuclear power accounted for 21.1% of the September fuel mix, up from 20.5% in August and 19.2% in September 2022.

Hydropower, wind power, oil and other renewables made up the remainder of the fuel mix in September.

Spot power, gas price dynamics

NYISO power demand was lower on month in September, with peakload averaging 20,452 MW compared with 21,957 MW in August, according to ISO data. Peakload in September 2022 averaged 19,983 MW.

Temperatures were slightly below historical normal averages in September with the monthly temperature averaging 68.2 degrees Fahrenheit compared to the historical average of 68.7 F across NYISO territory, according to CustomWeather data.

NYISO Zone J on-peak day-ahead power prices for September averaged $34.25/MWh, down 61% on year and up about 10% on month. Real-time on-peak power prices at the hub averaged $44.19/MWh, down 47% on year and up 28% on month.

Transco Zone 6 gas prices averaged $1.41/MMBtu in September, down about 79% from $6.61/MMBtu a year ago, and up about 14% on month from an average of $1.24/MMBtu in August.

"The timing of offshore wind construction in the state continues to present a substantial uncertainty to near-term market fundamentals," the S&P Global analysts said.

"At the end of August most developers requested substantial inflation adjustments for already-contracted projects, averaging a nearly 50% increase in contract prices," they said. "No further delays were confirmed in September, and the New York State Energy Research and Development Authority has supported these requests, but without these adjustments project cancellations are possible."