Washington (Platts)--14May2015/231 pm EDT/1831 GMT

Ample generation capacity and low natural gas and electricity prices should spell good news for US consumers this summer, Federal Energy Regulatory Commission staff said in a new market assessment, released Thursday.

"Fuel prices tend to drive power prices and fuel prices are low," Lance Hinrichs, of FERC's Office of Enforcement, said at the commission's monthly meeting in Washington. "The system is looking to be very adequately supplied," both in terms of generating capacity and fuel, Hinrichs added.

Market conditions in the coming months will reflect continued low gas prices that have resulted from strong production, as well as the recovery of fuel stockpiles at coal-fired power plants, according to FERC staff's Summer 2015 Energy Market and Reliability Assessment.

"Going into summer, the average NYMEX futures price for June through August is $2.89/MMBtu, which is 40% lower than in 2014," Omar Cabrales of FERC's Office of Enforcement, said regarding natural gas prices. "This is consistent across the country, with the Boston area's Algonquin city-gate showing the largest differential, at 46% below last year, and averaging $2.96/MMBtu for the summer," he added.

In addition, forward peak power prices are down an average 24% from this time a year ago, the staff presentation said. "By region, this ranges from down 34% at the ISO New England internal hub to down 13% at the Mid-Columbia hub, reflecting worsening drought conditions in the Pacific Northwest." according to the presentation.

Electric system reserve margins are adequate in all regions, despite modest load growth triggered by increased industrial activity, staff said. Meanwhile, the rebuilt 500-kV Susquehanna Roseland power line that runs between Pennsylvania and New Jersey was placed into service on May 11 and is expected to lower congestion in this region of the PJM Interconnection, said Louise Nutter from FERC's Office of Electric Reliability.

FERC staff will keep an eye on a couple of potential reliability issues, including the impact of the western drought on hydropower supplies and that of a planned Algonquin Gas Transmission outage in the Northeast.

--Kate Winston, newsdesk@platts.com
--Edited by Valarie Jackson, valarie.jackson@platts.com

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