US POWER TRACKER: NYISO power prices mixed in November, forwards remain elevated

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New York Independent System Operator power prices in zones J and G increased slightly on month in November but declined by about 35% on month in Zone A, while elevated natural gas prices remain a primary driver of elevated annual power price expectations.

NYISO Zone G Hudson Valley on-peak day-ahead power prices averaged $61.66/MWh in November, nearly 3% higher on year and about 6% higher on month. On-peak real-time power prices at the hub increased by 6.5% on year in November and almost 12% on month, according to NYISO data.

NYISO Zone J New York City on-peak day-ahead power prices averaged $62.46/MWh in November, which was 1.7% higher on year and about 1% higher on month. On-peak real-time power prices averaged $64.30/MWh in November, about 7% higher on year and roughly 9% higher on month.

NYISO Zone A Western New York power prices averaged $29.07/MWh in November, which was about 39% lower on year and 35% lower on month. On-peak real-time power prices at the hub averaged $26.72/MWh in November, roughly 51% lower on year and almost 38% lower on month. Power prices were extremely volatile in November, with a maximum on-peak day-ahead price of $47.42/MWh and a minimum price of $11.27/MWh.

Transco Zone 6 natural gas prices averaged $4.81/MMBtu in November, which was 2.3% lower on year and 2.4% higher on month. "Delivered gas prices are expected to remain elevated through the remainder of the year and into next year," S&P Global Commodity Insights power market analysts said in a recent research note.

Power demand increased on month in November with peak load averaging 18,374 MW compared with an average of 17,155 MW in October, according to ISO data. Peakload declined 1.3% in November on year.

Power demand was higher as temperatures decreased heading into winter. The average November high temperature in the NYISO footprint was 54.9 degrees Fahrenheit, compared with an October high of 62.8 degrees F, according to CustomWeather data.

The average November low temperature was 41.4 degrees F compared with an October average low of 48.1 degrees F. Heating degree days increased as temperatures fell, rising from an average of 9.1 in October to an average of 16.6 in November.

Power generation fuel mix

Dual fuel generators, which typically run on gas with oil as a backup fuel, accounted for 25.1% of the NYISO power generation fuel mix in November, up from 22.9% in October and 22.1% in November 2021, according to grid operator data.

Gas-fired generation accounted for 23.2% of the November fuel mix, down from 26.5% in October and 24.1% in November 2021. Gas-fired generation averaged 6.5 aGW for November to help meet the incremental demand, up 1.5% from the year prior, according to S&P Global.

Nuclear power accounted for 23.9% of the fuel mix in November, up from 22.9% in October and 23.7% in November 2021.

Hydropower accounted for 20.5% of the generation mx in November, down from 21.2% in October and 24.3% in November 2021, and wind power increased, accounting for 5.4% of the November fuel mix, up from 4.4% in October and 4.2% in November 2021.

Forward power, gas prices

Zone G on-peak forward power prices for December averaged $113.12/MWh in November trading, which was about 8% lower on month and 31% higher on year, according to Platts M2MS data. Forward power prices for January 2023 averaged $202.52/MWh, roughly flat on month and about 59% higher on year, and forward power for February 2023 averaged $196.82/MWh which was down about 4% on month and up nearly 76% on year.

Zone J on-peak forward power prices for December averaged $119.58/MWh in November trading, a decrease of almost 10% on month and an increase of about 32% on year. Forward prices for January 2023 averaged $210.54/MWh, down 1.5% on month and up almost 53% on year. And forward power prices for February 2023 averaged $203.89/MWh, down nearly 4% on month and up by about 67% on year.

Zone A forward power prices were much lower than the other major hubs, with prices for December averaging $58.27/MWh in November trading, which was down about 13% on month and down 4% on year. Forward power for January 2023 averaged $106.02/MWh, down about 7% on month and up about 36% on year, and forward power for February 2023 averaged $93.47/MWh, mostly flat on month and about 27% higher on year.

Transco Zone 6 forward gas prices for December averaged $9.10/MMBtu in November trading, which was down about 4% on month and up by about 30% on year. Forward gas prices for January 2023 averaged $15.83/MMBtu which was up about 51% on year and forward gas for February 2023 averaged $15.97/MMBtu, down about 7% on month and up nearly 57% on year.

"Gas prices for the winter (November-March) have decreased to an average of $10.9/MMBtu, from $12.4/MMBtu in our prior outlook and prices are not expected to moderate until next April," the S&P Global analysts said.