Wholesale electricity prices and demand in New England, July 2015
Amazingly Low Wholesale Electric Price in 2015 July
Tuesday, August 11, 2015 at 2:07PM
Another month of low natural gas prices brought July’s average power price to the third-lowest monthly level in 12 years
Following on June’s record-setting average natural gas and wholesale electricity prices, which were the lowest monthly prices in 12 years in New England, July’s prices were also very low, but slightly higher than June’s record. The average monthly natural gas price was 37% lower than the average price during July 2014, and was the third-lowest monthly average in 12 years. As a result of the low natural gas prices, July’s average wholesale power price was the third-lowest since March 2003, when New England launched competitive power markets in their current form. The July average power price was $25.40 per megawatt-hour (MWh)*, 27% below the year-ago price.
July brought warmer weather that drove up air conditioning use, which drove up demand for power. As a result, total power usage during July was almost 20% higher than during June. The average price of natural gas during July was almost 17% higher than the June price. July’s average real-time electric energy price of $25.40/MWh was about 30% higher than June’s average price of $19.61/MWh, the lowest monthly price in 12 years.
In fact, wholesale power and natural gas prices during April, May, June and July this year are among the lowest monthly averages since March 2003 in New England. But these low prices come on the heels of near-record-high prices just a few months earlier, highlighting the price volatility stemming from natural gas pipeline constraints during periods of high demand in New England. February, the coldest month since 1960, brought the third-highest average wholesale price of power of $126.70/MWh. Due to heavy demand for natural gas for both heating and power generation, combined with pipeline constraints, the average price of natural gas during February was $17.27 per million British thermal units (MMBtu) **, the fourth-highest monthly level since 2003.
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