Wholesale electricity prices fell by third in 2015
Decline driven by lower prices for natural gas
THE OPERATOR OF THE REGION’S POWER GRID said on Thursday that the wholesale price of electricity fell by more than a third in 2015, primarily because of lower prices for natural gas, the fuel used to produce nearly half of New England’s electricity.
ISO New England said the average wholesale price for electricity in the region fell from 6.3 cents a kilowatt hour in 2014 to 4.1 cents in 2015. The retail price of electricity, which includes charges for transmission, distribution, and energy efficiency measures, typically tops 17 cents a kilowatt hour.
The lower price of electricity in 2015 was due primarily to slumping prices for natural gas. According to ISO New England, the average price of natural gas in the region fell 41 percent in 2015. The average price per million British thermal units dropped from $7.99 in 2014 to $4.73 in 2015. ISO New England said the price spiked to an average of $11.36 during the winter months of January, February, and March “when the total regional gas demand stressed the region’s natural gas infrastructure,” but even that higher price was still 43 percent less than in 2014.Electricity consumption held steady in 2015, with total usage falling 0.3 percent.
The Baker administration is also hopeful that the region’s natural gas pipeline infrastructure can be expanded to keep the relatively cheap fuel flowing, particularly in winter months when capacity often becomes tight because so much of the fuel is being used for heating.