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Energy Market Update: February 5, 2018

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How will peak electric power prices affect the market in the East?

In this week's Energy Market Update, Tim Bigler — Direct Energy Business Energy Strategist — looks at regional electric power prices.

Watch the video below to learn more.



Regional Electric Prices

Power prices across the United States, specifically in the eastern portion of the U.S., are being driven by record gas prices.

ISO New England had a shift up in the peak prices from $80 in 2017 to $90 in 2018. NYISO zone J has had power prices shift downwards, and this is due to pipeline expansions in that area.

PJM/PSEG has some substantial gas-on-gas competition, which is the reason for the increase in peak price around $70. NYISO zone A had a price drop down to $45 due to the substantial amount of gas in the area.

PJM/ConEd dropped to peak $40 and this again is due to the lower cost to get gas and expansions of pipelines.

ERCOT North Hub peak prices go from $100 to $80 due to retirement and natural gas prices slightly higher.

Lastly, CAISO, despite having all the renewables, had a slight shift upwards closing out on $45 peak price.

Peak Power Price Impacts

What are the top impacts that are affecting these regions?

Retirement Risks affecting ERCOT and possibly CAISO.

Weather risks are very important in some zones, especially in NY and NE where pipelines become completely full. The lower/higher forward natural gas prices, help to keep an anchor on electric prices.

Finally, what will renewable growth do, will it have an impact on anchor prices or won’t it? We’ll look at that in the weeks to come.

Stay tuned to the Direct Energy Business Blog for the latest energy market news and information.

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Posted: February 05, 2018