Falling load, gas prices weaken NYISO prices in April RSS Feed

Falling load, gas prices weaken NYISO prices in April

Falling load and natural gas price levels weakened New York Independent System Operator prices in April, but this April’s prices were still higher than in 2016 because of higher natural gas prices, year over year, stakeholders learned Wednesday.

During Wednesday’s NYISO Business Issues Committee, Rana Mukerji, NYISO senior vice president for market structures, presented a report about April’s market operations and prices, and Pallas LeeVanSchaik, vice president of Potomac Economics, NYISO’s independent market monitor, made a presentation about NYISO’s 2016 State of the Market Report, which identified certain issues that are causing problems for market participants.

Mukerji reported that load-weighted average real-time locational marginal prices were $30.81/MWh in April, down from $32.21/MWh in March but up from $26.57/MWh in April 2016.

Daily loads averaged 377 GWh in April, down from 419 GWh in March and 385 GWh in April 2016, Mukerji said in his written report. NYISO does not allow the media to listen to stakeholder meeting conference calls.

At the Transco Zone 6 New York price point, spot natural gas averaged $2.81/MMBtu in April, down from $3.49/MMBtu in March but up more than 70% from April 2016’s average of $1.62/MMBtu, Mukerji said.

Regarding the 2016 State of the Market Report, LeeVanSchaik noted that in 2016 NYISO’s all-in power prices, including energy, capacity, ancillary services and other costs, were the lowest they have been since 2009, as has average natural gas prices, LeeVanSchaik said in his report.

One new recommendation in the report is to consider revising rules to appropriately compensate operating reserves when they help manage congestion.

In 2016, 92% of real-time congestion on 345-kV lines into New York City occurred because reserve units were not thought to be available, LeeVanSchaik said.

“Compensation for reserve units that relieve congestion would provide incentives for units to be available and reliable,” LeeVanSchaik said.

The situation is becoming more important since the May 1 expiration of the ConEd-PSEG wheel transmission arrangement at the juncture of the state lines of northern New Jersey, southern New York and eastern Pennsylvania, LeeVanSchaik said.

On Monday, Moody’s Investors Service downgraded the owner of Astoria Energy’s 585-MW plant in Queens, New York, because weak energy and capacity prices in the area diminish the owner’s ability to reduce its debt, despite the fact that the $1.3 billion natural gas-fired, combined-cycle plant is relatively new, completed in 2011, and is considered “very efficient,” with heat rates of about 7.3 MMBtu/MWh, with a “fairly stable” capacity factor of 70%.

In April 2016, Moody’s said the plant’s location in “the most constrained zone in the New York ISO” enabled it to earn “premium energy and capacity market revenues.”
Read full article at Platts