More record peak power loads across the country and increased natural gas use were two major highlights of the U.S. electric power market in the summer of 2006, but overall power consumption only inched up, according to a report released by the Federal Energy Regulatory Commission last Thursday. The report appeared on new Market Oversight web pages unveiled at the Commission’s regular meeting.

While U.S. electricity consumption in summer 2006 grew only by 1% compared to summer 2005, peak loads were higher at various times in different regions. Despite these peak demand records, “the bulk power grid and wholesale power markets performed well under the stress,” the Electric Power Market Summary for Summer 2006 said. Milder weather during parts of June and August brought overall consumption back in line with the previous summer, except in the West.

The Commission credited “unprecedented generation availability and robust demand response” with helping to maintain reliability during the peak periods. Generator outages “were at unusually low levels during the summer.” Power prices declined in the Northeast and Midwest and rose in PJM and California. Factors helping to moderate prices were lower natural gas prices, more nuclear and hydropower availability and occasional moderate weather.

Although the California Independent System Operator (CAISO) reached a Stage 2 emergency (reserves below 5%), load reduction programs successfully cut more than 4.1% or 2,000 MW from peak load. Also, “California reported during its peak week it had the lowest power plant outage rate ever.” Demand reduction and high generator availability also benefited other trouble spots in southwestern Connecticut and on Long Island, NY, in the East.

Ontario’s new scheduling system, good generation availability — including wind and hydropower — and transmission upgrades, helped avoid operational problems in that area.

Prices generally reflected the demand scenarios in the different regions. Average day-ahead on-peak prices for the summer rose 14% in the Mid-Atlantic (Western Hub) to an average $73.23 per MWh and 5% in California to an average $68.71. Prices went down by 9% in the Midwest (Cinergy Hub) to $47.90 and New York (Zone J) $101.19 and 16% in New England (ISO-NE Internal Hub) to an average $63.63.

On certain peak days scarcity prices went as high as $1,500/MWh for a few hours for the New York Independent System Operator (NYISO) and as high as $1,000 MW for a few hours for ISO-NE. In western bilateral markets peak prices reached and occasionally exceeded the western soft cap of $400/MWh on a few days.

Natural gas use for power generation increased 10% in summer 2006 compared to summer 2005, with the Western Electricity Coordinating Council and the Florida Reliability Coordinating Council showing the largest increases in the use of natural gas which, depending on the location, was 10-20% cheaper than the previous summer. Also, the record peaks brought on the use of the most expensive power, which is natural gas-fired.

Power from renewables ran second to natural gas for increased use in summer 2006. Renewables were up 6.58%, while hydropower was up nearly 4%, nuclear increased 1.40% and coal by a minuscule 0.03%. The big loser was oil, which lost more than 50% market share.

Meanwhile, FERC’s new web pages, produced by its Energy Market Oversight (EMO) division, display charts of current basic information collected by the agency on natural gas and power supply, demand, flows, storage and prices for the markets the Commission oversees, with detailed regional, and RTO breakdowns gathered from a variety of sources.

The idea is to make available to the public the information FERC uses to monitor the market. Chairman Joseph P. Kelliher described the extensive information system as “a living state of the market report.” Those who don’t want to wait for the Commission staff to put together all the information for a completed seasonal or monthly report can go to the web pages, which are updated as information comes in, and pick out what they need.

Steve Harvey, head of EMO, part of FERC’s Office of Enforcement, took the Commission on a tour of the website during the open meeting. Market reports compiled by the Commission, past and present also will be accessible on the site. The site, accessible from the https://www.ferc.gov/ home page, is under the heading. Market Oversight. Subsections include State of the Markets, Reports & Analysis, Market Snapshots, Market Views, Electric Power Markets, Natural Gas Markets, and Other Markets.

The electric power segment is separated into market regions and RTOs with market descriptions and statistics, and charts on financial trading volumes, supply and demand and data on bilateral, RTO and general market prices.

The other markets covered include coal, oil, emission allowances, weather and LNG.

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