NYISO Tracker: Power spot prices follow weaker gas prices, power demand

Houston — New York Independent System Operator wholesale power prices in August dropped an average of 16% on the month, the biggest decline across the country, following weaker spot gas prices.

NYISO peakload averaged 24.35 GW in August, a drop of 9% on the year but up almost 2% on the month. New York City had 37.2% more cooling-degree days in August than normal and 15% more than last year, according the US National Weather Service data.

Gas prices drive power price movements

NYISO Zone A West on-peak day-ahead locational marginal price plunged 29.4% on the month in August to average $25.57/MWh, according to ISO data. The on-peak real-time LMP dropped 28.3% to average $25.87/MWh.

"The downward month-on-month movement in NYISO Zone A real-time price can be attributed primarily to loads, which were over 8% lower month on month," said Kieran Kemmerer, S&P Global Platts' North American power analyst. "This decline in loads is mainly driven by weather, as our estimates for downside to load stemming from coronavirus have continued to decline in magnitude from July in NY."

Additional downward pressure stemmed from a 7-8% month-on-month decline in the gas price in the region. Dominion South spot gas averaged $1.210/MMBtu in August, a drop of nearly 30% on the year, according to Platts pricing data.

"As a further testament to the impact of load decline, while Zone A loads were actually quite similar year-on-year, gas price had a limited impact on power price in August from a year-on-year perspective," Kemmerer said about Zone A load down about 5% on the year.

On the east side of the ISO footprint, Zone G HVL on-peak day-ahead LMP averaged $24.19/MWh, a decrease of 12.6% from a year ago and the biggest year-on-year power hub drop outside of Texas.

NYISO Zone J NYC on-peak has the widest day-ahead to real-time spread at negative $2.57/MWh in August.

Helping fuel declines were weak gas prices.

Spot gas for Transco Zone 6 New York averaged $1.474/MMBtu in August, sinking 21.2% on the year and down 12.7% on the month.

Generation mix changes

Dual fuel generation remained the lead fuel source even at almost 30% of the total mix in August, as it lost nearly 2 percentage points on the month, according to ISO data. Dual duel output averaged 129 GWh/day, a drop of 9.6% month on month.

Natural gas-fired generation fell 1.2 percentage points from July to average almost 24% of the total fuel mix, as output fell 8% on the month to average 102.8 GWh/d.

Hydro-power generation increased 1.1 percentage point from July to average 18% of the fuel mix for August, as output increased 1.6% to average 76.6 GWh/d.

Total generation average 429.258 GWh/d for August, a drop of 4% from July, according to ISO data.

Power forwards curve trending lower

Power forwards continued to trend lower than 2019 packages and following gas forwards.

NYISO Zone J on-peak September rolled off the curve at $25.50/MWh, 11.3% lower than where the 2019 package ended, according to Platts data. The 2020 September package averaged $26.10/MWh in its last month of trading, a drop of 15.2% from where the 2019 package averaged a year ago.

The trend continued down the curve.

Zone J on-peak October averaged $24.89/MWh, a decrease of 16.2% from the 2019 package average last August, while on-peak November averaged $32.34/MWh, down 5.2% from the 2019 counterpart a year ago.

Power forwards were following gas forwards.

The Transco Zone 6 September contract averaged $1.458/MMBtu, down 18.2% from the 2019 contract last year, and October averaged $1.559/MMBtu, down 12.8%, while November averaged $2.866/MMBtu, an increase of 27.5% from its 2019 counterpart.