New England Electricity Prices Hit 9-Year Low
Driven by lower demand and plummeting natural gas prices, wholesale electricity prices in New England fell nearly 23 percent last year, reaching the lowest levels since 2003, according to ISO New England Inc.
ISO, the operator of the region's bulk power system and wholesale electricity markets, said preliminary figures show prices fell from $46.68 per megawatt hour in 2011, to $36.09 last year. The 2012 price was almost 26 percent lower than the average cost in 2003, when competitive markets were introduced.
The decline led the price paid for electric energy in the region to fall by more than $1 billion, from $6.7 billion in 2011 to $5.2 billion last year. Five years ago, the cost was as high as $12.1 billion, when natural gas hit record-high costs.
Natural gas, the predominant fuel used for generating electricity in New England, fell 20 percent last year, to $4.01 per million British thermal units. The decline was due to increased production of natural gas from the Marcellus shale field in New York and Pennsylvania, ISO said.
The organization also said the lingering effects of the recession combined with increasing energy efficiency efforts and a warmer winter to reduce consumption last year. Overall, electricity demand in New England dropped nearly 1 percent, to 128,007 gigawatt hours. ISO said when "annual variations in weather" are taken out of the equation, allowing demand to be looked at on a comparable year-to-year basis, consumption dropped 0.6 percent in 2012.
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