NewEngland monthly wholesale electricity prices saw record or near-record lows in2015, following low natural gas prices during most of the year.
fromISO New England Inc.show the average annual price of wholesale power in 2015 dropped to thesecond-lowest level in 12 years, tracking the price of natural gas, which alsofell to its second-lowest level in 12 years.
About49% of total generation in New England in 2015 was fueled by natural gas, whichsaw prices in the region and across the country reach their lowest levels innearly two decades as a result of high production, high storage levels andrelatively low demand fueled by mild weather.
Ofthe 10 months with the lowest average monthly power prices since 2003, when theregion's competitive wholesale electricity markets in their current form wereintroduced in New England, six occurred in 2015.
Butwhile natural gas and power prices were low for most of the year, thefourth-highest monthly natural gas price and the third-highest average monthlypower price were recorded during February 2015, which was the coldest month inNew England since at least 1960.
"Thevolatility we saw last year in wholesale power prices — going from thethird-highest monthly price in February to the lowest in June, and staying lowthrough the rest of the year — illustrates the impact of natural gas pricing,and natural gas pipeline constraints, on the region's power system. When theweather is mild and heating demand for natural gas is low, New England'snatural gas infrastructure has room to carry in the low-priced natural gasavailable on our doorstep," Gordon van Welie, president and CEO of ISO NewEngland, said.
"Further,New England has an expandingfleet of newer, more efficient natural-gas-fired powerplants," he added. "So when they can get fuel, New England wholesalepower prices are on a par with the prices in other areas of the country thattypically have lower prices."
Lastyear saw the lowest and second-lowest average monthly power prices with a Juneaverage at $19.61/MWhand a December average at $21.35/MWh, as well as the second-lowest annualaverage price of wholesale electric energy at $41/MWh, down 35% from 2014'saverage price of $63.32/MWh and second only to 2012's average power price of$36.09/MWh.
Theyear also saw the second-lowest annual natural gas price at $4.73/MMBtu, secondonly to the $3.95/MMBtu average in 2012, and the third-lowest annual electricenergy market value of $5.91 billion, behind the $5.19 billion in 2012 and$5.88 billion in 2009.
However,the year also saw the third-highest monthly wholesale power price of$126.70/MWh and the fourth-highest monthly natural gas price of $17.27/MMBtu,both recorded in February.
Overall,demand for electricity remained flat in New England in 2015, falling just 0.2%to 126,899 GWh. When annual variations in weather are factored out, allowingdemand to be evaluated on a comparable basis from year to year, electricityconsumption would have dropped 1.1% to 125,779 GWh in 2015 compared with theweather-normalized 127,114 GWh of electricity consumed in 2014, ISO-NE said.
Mild weather contributed tolow prices in February
Reflectingmild weather and lower demand for both natural gas and electricity, the averageprices of both natural gas and wholesale power in February were down 80% yearon year from February 2015, which was the coldest month in New England in morethan 50 years, ISO-NE said in a separate report released March 28.
Theaverage monthly wholesale power price during February was $27.39/MWh, theninth-lowest monthly average price since March 2003, and nearly 80% lower thanthe near-record-high price of $126.70/MWh during February 2015.
TheFebruary 2016 average price was also down nearly 20% month on month from theJanuary average price of $33.99/MWh.
Theaverage natural gas price during February was $3.78/MMBtu at the in Massachusetts, a decline of 78.1% year on year from $17.27/MMBtu in February2015. The February 2016 natural gas price dropped 20.2% month on month from theJanuary price of $4.73/MMBtu.
Energyusage during February dropped 8.5% to 10,095 GWh from the February 2015 energyconsumption of 11,032 GWh. The average temperature during February was 31.7degrees Fahrenheit in New England. The dewpoint, a measure of humidity, came inat 19.7 degrees F, compared to 5.1 degrees F in February 2015. The impact of February'smild weather is reflected in the 966 heating degree days during the month,compared to a normal level of 1,021 HDDs during February in New England. Duringthe previous February, the region recorded 1,346 HDDs.
Peakdemand for the month was recorded at 19,524 MW on Feb. 15 during the hour from5-6 p.m. ET, when the temperature in New England was 18 degrees F and thedewpoint was 7 degrees. The February peak was down 2.9% from the February 2015peak of 20,108 MW, set during the hour from 6-7 p.m. on Feb. 16, 2015, when thetemperature was 13 degrees F and the dewpoint was -10 degrees.
Thehighest winter peak demand in New England was 22,818 MW on Jan. 15, 2004,during the hour from 6-7 p.m., when the temperature was -1 degrees F and thedewpoint was -20 degrees F. The all-time peak demand in New England was 28,130MW, recorded during an August 2006 heat wave, when the temperature was 94degrees F and the dewpoint was 74 degrees.
Naturalgas-fired and nuclear power plants produced most of the 8,325 GWh of electricenergy generated within New England during January, at about 41% and 33%,respectively. Hydroelectric resources in New England generated 10%. Renewableresources generated about 11% of the energy produced within New England,including 7.1% from wood, refuse and landfill gas; 3% from wind, and 0.4% fromsolar resources. Coal units generated 4%, and oil-fired resources produced 1.2%of the energy generated within New England. The region also received netimports of about 1,921 GWh of electricity from neighboring regions.
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