Wholesale Electricity Prices Jumped 55% Last YearMar 19 - McClatchy-Tribune Regional News - Brian Dowling The Hartford Courant
Higher natural gas prices in New England last year resulted in a steep 55 percent increase in wholesale electricity prices, according to preliminary results from ISO New England, the operator of the region's electric grid and electricity markets. The average price of a megawatt hour in New England rose to $56.06, up from $36.09 in 2012. A lack of capacity in natural gas pipelines that feed the region caused the fuel's price to increase as power plants reported difficulties getting fuel. Almost half of New England's electricity came from burning natural gas in power plants in 2013, during which time average prices for the fuel jumped 76 percent to $6.97 per million British thermal units. The jump in prices on the wholesale electricity market quickly made a dent in the retail market, where customers throughout New England saw higher electricity bills. "New England sits on the doorstep of the Marcellus shale, which has increased supply and lowered natural gas prices significantly, at least in areas of the country that can access that gas," Gordon van Welie, ISO New England's chief executive, said in a statement. "However, the limited pipeline capacity coming into New England means that sometimes natural-gas-fired generators have difficulty getting fuel, and that not only pushes up prices, it also creates a risk to reliable operation of the power system." In response to the price increases, governors of all six New England states are pursuing development of new natural gas pipelines into the region. The proposal, which includes covering some developments costs through fees on electric bills, is in the early stages. Actual electricity usage in New England rose a single percent to 129,350 gigawatt hours. That rise together with the price increase resulted in an jump of the total value of the region's wholesale electricity market to $8.0 billion, from $5.2 billion in 2012. While the increases were notable, they were still short of record highs for electricity and natural gas prices in 2008, when power peaked at $80.56 per megawatt hour and $10.07 per million British thermal units. http://www.energycentral.com/functional/news/news_detail.cfm?did=31878171& |