Wholesale price of electricity rose 13 percent, report says
The average wholesale price of electricity in New England’s power market rose 13 percent in 2014 despite a 2 percent decrease in power usage from the year before, according to a new report by the region’s grid operator.
The increase in the average wholesale power price was driven largely by higher prices for natural gas during the first three months of 2014 when cold temperatures increased the demand for the fuel, according to officials with ISO-New England. The information was contained in the 2014 Annual Markets Report from the Holyoke, Massachusetts-based power grid operator, which also runs the region’s wholesale electric market.
An increase in natural gas prices typically causes a corresponding hike in power prices because more than half of the electricity produced in New England comes from generating plants that run on the fuel.
Jeffrey McDonald, ISO New England’s vice president of market monitoring, said “the wholesale electricity price trends we saw in 2014 tracked the fluctuations in fuel prices, which is what we expect from competitive markets.“