U.S. wholesale electric power prices up

The average day-ahead price of on-peak, wholesale electricity in every region of the continental U.S. in the first half of 2013 is up from the first half of 2012, according to the U.S. Energy Information Administration (EIA).

As of July 22, power prices at major U.S. trading hubs ranged from $35-65/MWh, similar to last year at this time, except for the Pacific Northwest, where prices were about $25/MWh. Spot natural gas prices at major hubs increased between 42 percent and 146 percent between the first half of 2012 and the first half of 2013.

Trends in power prices were generally set by higher natural gas prices in 2013 compared to 10-year low prices in April 2012. However, the increase in power prices varied across markets as regional natural gas supply issues drove larger increases in the Northeast and Pacific Northwest.

In the Northwest, a decline in precipitation reduced hydroelectric generation and made the region more dependent on gas-fired power than in the first half of 2012, which drove power prices 82 percent higher compared to the first half of 2012.

The California power market experienced a 59 percent increase in wholesale power prices largely due to the outage at the San Onofre Nuclear Generating Station (SONGS). The outage also caused a large and unusual separation of power prices between the northern and southern parts of the state’s electric system, the report said.

Prices in New England were the highest in the nation mostly because of pipeline constraints that limited the delivery of natural gas in New England pushed electricity prices above $200 per megawatt-hour (MWh) for several days this winter.

Prices in Texas increased less than much of the rest of the nation, largely because of the mild weather this spring, so there were no short-term price increases in the market. In April 2012, wholesale prices in Texas spiked because of a sharp increase in temperature near the end of the month.

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