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Calif. power prices increase in August despite anemic demand

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Calif. power prices increase in August despite anemic demand

Wholesale power prices in California joined the broader uptrend year over year in August, despite subdued demand.

Day-ahead on-peak power prices at the California ISO averaged $65.85/MWh in August, reflecting a 20.6% gain year over year that was the median growth rate for the review period. ISO New England posted the largest percentage increase of almost 64.7% at $49.68/MWh, while the Southwest Power Pool notched the smallest gain of 0.2% at $29.44/MWh.

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Demand was higher across the country in August, except in California. Peak load grew by 2.9% year over year at the Electric Reliability Council of Texas to as much as 14.1% at ISO-NE, but faltered by 4.8% in CAISO.

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California had the highest-valued natural gas during August, however, with CAISO spot gas pricing pegged at $3.670/MMBtu, up roughly 19.1% year over year. Natural gas prices at ISO-NE and the New York ISO averaged only at $3.135/MMBtu and $3.079/MMBtu, respectively.

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Natural gas-fired implied heat rates, or the efficiency rate at which the market cost of power equals the cost of burning natural gas to produce electricity, increased overall in August, but had the slowest growth rate in CAISO. Gas-fired implied heat rates clawed up only 1.3% year over year in August in CAISO but jumped by as much as roughly 34.5% in ISO-NE.

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Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities pages.