ANALYSIS: NYISO forward power, natural gas prices decline on month in November

New York Independent System Operator wholesale power prices were as much as 200% higher on the year in November as spot natural gas prices increased by similar levels, while forward power and gas prices decreased on the month during November trading.

NYISO Zone J New York City day-ahead on-peak power prices averaged $61.42/MWh in November, a roughly 153% increase from the November 2020 average of $24.24/MWh. Day-ahead on-peak prices at the hub increased by $1.62/MWh or 2.7% on the month.

Zone J real-time off-peak power prices increased by about 207% on the year in November to average $48.71/MWh, which was a 10.25% increase from October.

NYISO Zone G day-ahead on-peak power prices increased by about 157% in November on the year to average $59.78/MWh. Prices at the hub increased by about 4% on the month in November.

NYISO Zone A power prices increased by more than 200% across the board on the year in November. Zone A on-peak day-ahead November averaged $47.74/MWh, about 206% higher than the November 2020 average of $15.59/MWh. Zone A real-time off-peak power prices increased by about 346% in November on the year, rising from the November 2020 average of $7.48/MWh.

Despite US benchmark natural gas prices declining recently, northeastern gas prices have held their ground as the weather has cooled. Cash Henry Hub fell 18.50 cents to trade at $3.855/MMBtu on Dec. 3, a price level not seen since August.

Transco Zone 6 spot gas prices averaged $4.92/MMBtu in November, a nearly 8% increase from October and 227% higher than the November 2020 average of $1.51/MMBtu.

NYISO's November peak load averaged 18,618 MW, a 4.6% increase from the October average of 17,807 MW, and similar to the November 2020 average of 18,297 MW, according to ISO data.

The average high temperature across NYISO territory in November was 51.3 degrees Fahrenheit compared to an October high of 66.8 degrees F, according to CustomWeather data. The November average low temperature was 37.8 F compared with 55.0 F in October.

As a result, heating degree days averaged 19.9 in November, up from the October average of 4.7, while November saw zero cooling degree days compared with 0.72 in October.

Power generation fuel mix

Natural gas-fired power generation accounted for 24.1% of the NYISO fuel mix in November, down slightly from 27.4% in October, while dual fuel units remained steady, accounting for 22.1% of the fuel mix in both months.

Nuclear power accounted for 23.7% of the NYISO fuel mix in November, up from 21.7% in October, but down from 30.8% in November 2020, a change impacted by the retirement of the Indian Point nuclear plant that supplied zones G and J.

Hydropower was fairly flat, accounting for 24.3% of the fuel mix in November, up slightly from 23.5% in October.

Wind power picked up slightly, accounting for 4.2% of the fuel mix in November compared with 3.5% in October.

The NYISO gas fleet consumed about 0.89 Bcf/d in November, down 6.8% from October and up 19.8% from November 2020. Assuming a similar heat rate to January 2021, the NYISO's gas fleet would consume about 0.89 Bcf/d in January 2022, according to S&P Global Platts Analytics data.

Forward power, gas prices

On-peak forward power prices declined a bit on the month in November, with Zone G December averaging $86.14/MWh, a 13% decline from where the package traded in October, according to Platts M2MS data.

Zone G on-peak January 2022 power prices averaged $127.07/MWh and the February 2022 contract averaged $111.84/MWh in November trading. Forward power prices at the hub remained well above last year's levels, with December 2020, January 2022, and February 2022 all more than 150% higher than where the packages traded in November 2020.

Zone J on-peak power for December averaged $90.34/MMBtu in November trading, down about 13% from October. January 2022 averaged $137.76/MWh and February 2022 averaged $122.41/MWh, decreases of 6% and 12% on the month, respectively.

Transco Zone 6 forward gas prices also declined on the month, with December 2021 averaging $6.95/MMBtu in November trading, a 10.6% decrease from where the contract traded in October.

Transco Zone 6 gas prices for January 2022 averaged $10.48/MMBtu in November trading, a 14% decline from October, and the February 2022 contract averaged $10.18/MMBtu in November trading, a 12% decline on the month.

"The outlook for NYISO fundamentals in the short-term has held relatively close to recent forecasts with the emphasis of risk lying more towards the outlook in New York [power] prices for the coming months, especially given the recent decline in gas prices," Platts Analytics said in a recent research note.