Region’s wholesale power price plummets in June
Mild weather, weak demand and low average natural gas prices sent June’s wholesale power price to under $20 per megawatt-hour, ISO New England reported Wednesday.
It was “by far the lowest monthly price in the 12 years New England has had competitive power markets in their current form,” the organization said.
June’s average electric energy price of $19.61/MWh was nearly half the June 2014 average price of $37.92/MWh. It was also nearly 23 percent lower than the previous record-low average monthly price of $25.39/MWh, recorded during March 2012.
“It’s supply and demand,” Matthew White, chief economist at ISO New England, said in the statement. “With June’s mild weather, demand for natural gas and electricity were both low, and the pipeline capacity was available to deliver a plentiful supply of exceptionally low-priced natural gas to generators in New England.”
But the swing in prices since February, when the average wholesale price of power was $126.70/MWh, “underscores the price volatility attributable to pipeline infrastructure constraints,” White said.
“During February’s record cold, demand for natural gas was so high that the pipelines into New England — which haven’t expanded at the same pace as natural gas demand growth — were running at or near capacity,” he said. “When natural gas demand is so high and the supply available to generators is limited, the price for natural gas delivered to New England rises dramatically — and so does the price for the electricity made from it.”
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