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.
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.