9% of region’s power bill incurred in one week

Overall, however, prices hit near-record lows in 2017

WHOLESALE ELECTRICITY PRICES in New England hit near-record lows in 2017, but they spiked dramatically during the last week in December when temperatures plunged.

The operator of the regional power grid said on Tuesday that the total value of New England’s wholesale electric market in 2017 was $4.5 billion, the second-lowest amount in the last 15 years. The lowest year was 2016, when the market was valued at $4.1 billion.

Prices were low because demand for power was down 2.7 percent, largely because temperatures were generally mild during the year. The average price of natural gas – the primary fuel used to generate electricity in New England – was $3.72 per British thermal unit. That price was the second lowest in the last 15 years, trailing only 2016’s price of $3.09.

The pricing picture changed dramatically during the last week in December, when extreme cold weather moved into the region. Demand increased for natural gas to heat homes, and pipeline constraints meant there was limited gas available for power generators. As a result, the price of natural gas spiked and the total value of the wholesale electric market during that one week was $396 million, or 8.8 percent of the bill for the entire year.

“Reliability was maintained with heavy use of oil-fired power plants, but operations became tenuous as their oil supplies were depleted and some neared their emissions limits,” the grid operator, ISO-New England, said in a press release.

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Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The report represented another data point in the debate over whether New England needs additional natural gas pipeline capacity. Opponents of new pipelines could point to the generally low prices and say the system is working just fine as is, while supporters zeroed in on the results from the last week in December when the lack of pipeline capacity meant electricity prices skyrocketed.

Stephen Dodge of the Massachusetts Petroleum Council said more pipeline capacity would have kept electricity prices affordable for the entire month of December. “The ISO data add to mounting evidence that all New England suffers from entirely needless, self-inflicted spikes in energy costs that can easily be eliminated with improved access to natural gas sources just 300 miles away in Pennsylvania,” he said.