NE electricity rates dropped in 2015
Wholesale electric power prices in 2015 fell to the second-lowest levels since 2003, according to a new report from ISO-New England, the independent organization that manages the region’s power grid.
That should mean that Vermont continues to see stable retail power rates, unlike other New England states whose rates more closely follow market prices, according to Christopher Recchia, commissioner of the Department of Public Service.
Recchia said Wednesday Vermont ratepayers were spared the high rate spikes in 2014 and 2015 seen in some New England states, when natural gas supplies were tight and temperatures were low. Other New England states’ rates are more closely attuned to the wholesale rates, he said.
“This will obviously help ratepayers,” Recchia said, adding Vermont utilities had more of their power needs met by long-term contracts and not contracts based on the spot market, which is more closely aligned with wholesale prices.
“We have the second-lowest rates in New England,” Recchia said, nothing that Vermont was second only to Maine. “We have very stable pricing. We want to be able to predict what rates are going to be. We also like them low,” he said. “Vermonters will likely benefit some from the reduced prices.”
ISO-New England spokeswoman Marcia Blomberg said wholesale electricity prices dropped to the second-lowest level in 12 years, and tracked the price of natural gas, which also fell to its second-lowest level.
Natural gas is now the predominant fuel used by New England power plants to generate electricity, representing about 40 percent of total generation in 2015.
But Blomberg pointed out that February 2015, which was extremely cold, had some of the highest wholesale rates in the past 12 years.
That month was the coldest month on record since 1960, she said. By June 2015, however, the price of natural gas and wholesale electricity had plummeted and remained low for the rest of the year.
When the weather is mild and heating demand for natural gas is low, New England’s natural gas infrastructure has room to carry in the low-priced natural gas, according to ISO-New England.