Spot market data from May shows a year-on-year shift in advantage away from gas-fired generation as power prices remained low in spite of rising natural gas prices.

Day-ahead on-peak power prices averaged 34.6% higher year over year across the U.S., with PJM Interconnection's and the Midcontinent ISO's average prices being the highest in the mid-$30s. Meanwhile, the southern and western portions of the country saw the largest year-over-year increases on a percentage basis.

Meanwhile, U.S. average spot natural gas prices at hubs serving generators jumped by 60.6% over the same period to $3.020/MMBtu. While the increase in PJM's spot natural gas prices exceeded that of the entire U.S., its increase in power prices lagged those of other regions.

Natural gas-fired implied heat rates, or the efficiency rate where the market cost of power equals the cost of burning natural gas to generate power, declined in every market, falling by an average 16.2% across the country, with PJM seeing the largest decline at 23.7% year over year.

At the same time coal-fired implied heat rates moved mostly higher year over year, with the Electric Reliability Council of Texas, MISO and PJM markets all supporting less efficient coal plants than they did a year ago.

While natural gas-fired generators saw a diminished advantage year over year, demand for electricity was flat to negative over the same period, with only the ERCOT market seeing significantly higher electricity production during the month.

Market data can provide clues as to which fuel sources are satisfying the most of the nation's demand for electricity. Data from the U.S. Energy Information Administration show natural gas edged out coal-fired generation in March after coal took the top spot for three consecutive months in spite of a 17.5 million MWh increase in electricity generated by burning coal.

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