New England Tracker: Cold snap drives up power, gas prices despite lower load

Houston — ISO New England wholesale power prices jumped an average of 22% year on year in October, following higher spot gas prices, as the region saw its first cold snap of the season late in the month.

Despite the cold snap, October peakload averaged 13.928 GW, down 1.4% from a year ago and down 8.2% from September, according to ISO data. Average temperatures across the ISO footprint in October were down 17% month on month and about 1.3% lower year on year, as heating-degrees days were up 7.4% from a year ago, according to S&P Global Platts Analytics data.

The cold snap hit the last week of the month and pulled Boston high temperatures from 76 degrees Fahrenheit on Oct. 1 to 42 F by Oct. 31, according to US National Weather Service data.

Spot power follows higher gas prices

A few days of cold weather was enough to move the market.

Spot gas at Algonquin city-gate averaged $2/MMBtu for October, a jump of 20.4% year on year and climbing 40.7% month on month, according to Platts pricing data. Prices reached as high as $6.790/MMBtu Oct. 30, the highest level since February.

Internal Hub on-peak day-ahead locational marginal prices ranged from a low of $18.13/MWh early in the month to a high of $60.71/MWh at the end of the month, the highest level since December 2019, according to ISO data. The on-peak day-ahead LMP averaged $27.53/MWh for October, up 22.1% year on year and up 20.3% month on month. Off-peak spiked 40% year on year and climbed 38.4% month on month to average $30.67/MWh in October.

The price spikes continued across the region. Boston Hub on-peak day-ahead LMP reached as high as $64.34/MWh Oct. 30 as Connecticut Hub on-peak day-ahead LMP reached $59.33/MWh, also both the highest since December 2019.

Fuel mix changes

Natural gas-fired generation increased it's share of the market, averaging 57.2% of the total fuel mix in October, up 9 percentage points year on year, according to ISO data.

Gas filled in the gap left behind when nuclear generation slipped 9.6 percentage points from a year ago to average 22.7% of the mix after Dominion's 1,235-MW Millstone-3 was shut Oct. 1 for refueling and remains offline.

Hydro-powered generation averaged 6.7% of the fuel mix, down 1.2 percentage points year on year, but up 3.5 percentage points month on month.

Power forwards trending lower

Lower gas forwards were pulling down power packages.

Algonquin city-gate November averaged $3.562/MMBtu and rolled off the curve at $3.293/MMBtu, 15.5% lower than where the 2019 contract ended a year ago. The December contract averaged $5.586/MMBtu, 13% lower than its 2019 counterpart last year, while the January contract averaged $7.009/MMBtu, down 20.3%.

Mass Hub on-peak November averaged $38/MWh in its last month, down 4.8% from where the 2019 package averaged a year ago. The 2020 package rolled off the curve at $38.25/MWh, 7.3% lower than where the year-ago package ended.

Mass Hub on-peak December averaged $51.75/MWh, falling about 14% from where its 2019 counterpart averaged last year, while in-peak January averaged $63.69/MWh, slipping 21% from the 2019 package a year ago.