Persistently low U.S. natural gas prices helped keep wholesale electricity prices down in 2019, according to a report from the Energy Information Administration (EIA) Friday.
Wholesale electricity prices at several major hubs were generally higher in 2019 than they were in 2018, though record-high summer demand led to much higher electricity process in the Electric Reliability Council of Texas (ERCOT) market in 2019, EIA said.
“Day-ahead, around-the-clock wholesale electricity prices averaged $38/MWh in ERCOT in 2019, up 13% from their 2018 average,” EIA said. “At other representative hubs -- such as those in the Independent System Operator of New England (ISO-NE), New York Independent System Operator (NYISO), and PJM Interconnection -- annual average wholesale electricity prices were generally 15% to 30% lower than in 2018. Much of this decline in wholesale electricity prices was the result of lower natural gas prices in 2019.”
Supply constraints in the aftermath of an explosion on Enbridge Inc.’s Westcoast system that restricted imports from British Columbia led to significant volatility and prices as high as $200/MMBtu at Northwest Sumas in early 2019.
“This increase also had implications for electricity markets in California, where prices also increased in February,” EIA said. “In New England, timely deliveries of liquefied natural gas helped reduce price volatility for both natural gas and electric power markets in the first quarter of the year.”
Meanwhile, wholesale electricity prices in Texas were on the rise in 2019, reaching their highest point on Aug. 12, when ERCOT, the grid operator for 90% of the electricity sold in the state, saw record-high electricity demand of 74.67 MW.