NYISO Tracker: Power prices plunge on year as pandemic weakens loads, gas

New York — Plunging power demand related to the novel coronavirus pandemic combined with cheap natural gas – also pandemic related – caused New York Independent System Operator prices to stay in the range of $15 to $20/MWh in May, the second-lowest level among ISOs, down sharply from May 2019. Summer forwards followed suit.

Among the eight ISOs or power regions included in S&P Global Platts' monthly Power Trackers, only the West region tended to have lower prices for the five pricing hubs included in the analyses, with day-ahead on-peak bilateral indexes ranging from about $11.60/MWh at the hydro-heavy Mid-Columbia to day-ahead on-peak locational marginal prices averaging as much as $17.50/MWh at the California ISO's NP15 Generation Hub.

In NYISO, the range was $15.71/MWh for day-ahead on-peak LMPs at the Hudson Valley Zone G to almost $20/MWh at the transmission-contrained West Zone A.

These NYISO prices represented year-on-year decreases ranging from 30% to more than 39%, and the eastern prices were between 1.5% and 2.5% below April's prices, while the Zone A price represented a 42.2% increase from April.

This May's average daily peakload, at 16.2 GW, was about 1.6% above April's but about 7.2% below May 2019's 17.5 GW.

The year-on-year decrease is likely unrelated to weather, as the population-weighted total of heating- and cooling-degree days this May is about 26% greater than May 2019, but is a big decrease – about 51% -- from this April.

New York has been the hardest hit by the pandemic, with 384,837 of the US' 1.9 million infections and 30,296 of the US' 110,804 deaths, according to data from state and federal sources reported by Worldometer, an international statistical data collector. Many of New York's businesses remain shut down with employees either furloughed or working from home.

At the Transco Zone 6 New York price point, spot gas averaged $1.349/MMBtu this May, down 10.7% from April's average and down by more than 40.7% from May 2019.

FORWARD MARKETS

July and August on-peak forwards tended to follow a year-on-year pattern similar to gas, even as the latest National Weather Service forecast for July, August and September indicated a 50% to 75% chance of above-normal temperatures for the Empire State, which would tend to support more power demand for air conditioners.

At the Hudson Valley Zone G price point, July on-peak electricity forwards averaged about $25.50/MWh this May, down 6% from this April and down almost 34% from the price that July 2019 forwards averaged in May 2019.

Hudson Valley Zone G August on-peak electricity forwards averaged about $26.15/MWh this May, down from almost $27 this April and down about $29% from the price that August 2019 forwards averaged in May 2019.

Transco Zone 6 NY July gas averaged $1.733/MMBtu this May, down about 28.5% from the $2.423/MMBtu that July 2019 gas averaged in May 2019, but up about 19.9% from April's average of $1.446/MMBtu.

Transco Zone 6 NY August gas averaged $1.779/MMBtu this May, down by more than 26% from the $2.407/MMBtu that August 2019 gas averaged in May 2019, and down 9.8% from this April's average of $1.973/MMBtu.

GENERATION MIX

May's generation total was down sharply on the year, reflecting weaker demand, and the generation mix therefore shifted slightly in favor of dual-fuel and nonwind renewables.

NYISO's daily generation output this May totaled just 94.4 GWh, down from April's 104.5 GW and down sharply from May 2019's 127.5 GWh.

Nuclear power retained its lead share, at 31.8% of the total, but this was down from April's 34.9% and May 2019's 38.7%.

Hydropower also retained its second position, essentially unchanged from April at 27.8%.

However, dual fuel resources – typically natural gas or fuel oil – moved into the third spot, with 17.8% to take third place, which was its ranking in May 2019, but is improved from April's 12.7%.