Light loads, largely driven by pandemic-related stay-home policies, combined with weak natural gas to prices push most Midcontinent Independent System Operator day-ahead on-peak power prices into the low $20s/MWh in April, down from March and April 2019 prices, and summer forwards weakened year on year
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Among five MISO hubs included in this analysis, the year-on-year decrease ranged from as little as 27.6% at the Indiana Hub to almost 38.5% at the Louisiana and Minnesota hubs. The month-to-month decreases ranged from about 4.1% at the Michigan Hub to as much as 7.2% at the Minnesota Hub.
Daily peakloads in April, averaging 66.5 GW, were down 10.2% on the month and 9.3% on the year.
But most of these decreases could not be explained by weather conditions, as heating-degree days this April were down about 19.8% from March but up 24.4% from April 2019.
In a Vistra Energy earnings conference call Tuesday, company officials said they observed MISO energy use decreases attributable to the novel coronavirus pandemic ranging from 9 to 11%, more than any of the four other power markets where Vistra operates.
The oil market crash that resulted from a lack of agreement between OPEC and Russia regarding production cuts to accommodate the pandemic's effect on travel has had an ancillary effect on natural gas in the MISO footprint.
At the Henry Hub, spot gas averaged $1.687/MMBtu this April, down from $1.746/MMBtu this March and down from $2.60/MMBtu in April 2019.
At the Chicago city-gate, which is important for most of MISO's North and Central regions, spot gas averaged $1.665/MMBtu, which was up from this March's $1.573/MMBtu but down from April 2019's $2.453/MMBtu.
In consequence, gas-fired generation expanded its lead over second-place coal-fired generation this April, both on the month and year. The gas fleet supplied 38.3% of MISO energy this April, up from 35.4% this March and 32.7% in April 2019.
In contrast, coal-fired generation's share fell to 24.6% this April from 29% this March and 34.4% in April 2019.
Nuclear generation's share also was up on the month and year, hitting 18.4% this April, up from this March's 17.4% and April 2019's 16.4%.
The wind fleet's output was down on the month but up on the year, averaging 14.1% this April, down from this March's 14.3% but up from April 2019's 13.1%.
Looking forward, energy traders seem to see little upside risk for summer power and gas forwards.
For example, at the Indiana Hub, July-August on-peak packages, averaging about $29.50/MWh, were down by more than 22% in comparison with July-August 2019 packages in April 2019.
Similarly, Chicago city-gate July-August packages, averaging about $19.25/MMBtu, were down about 23% in comparison with July-August 2019 packages in April 2019.
The National Weather Service's forecast for June, July and August, issued April 16, indicates even chances for near-normal temperatures for most of the MISO region, but enhanced chances for above-normal temperatures for southern Arkansas, eastern Indiana, all of Louisiana, Michigan and Mississippi, and eastern Wisconsin.