The average price of wholesale electricity throughout New England dropped 57 percent in December, largely due to milder weather that dampened demand for natural gas in the region, according to grid administrator ISO New England.
In December 2013, colder weather increased customers’ demand for natural gas to heat their homes, constricting natural gas supplies to the region and forcing New England’s power plants to rely on more expensive fuels to generate electricity. The average price of wholesale power that month was $98.53 per megawatt hour.
In December 2014, however, the weather wasn’t as cold, leaving more natural gas for the power plants. As a result, the average price of wholesale power was $42.47 per megawatt hour, a significant decrease from December 2013 and a 5 percent decrease from November 2014’s price of $44.86 per megawatt hour.
ISO also implemented its Winter Reliability Program in December, which is designed to help power plants buy fuels in advance of cold weather in case supplies – particularly of natural gas – become constricted. The program, which is in its second year, runs through the end of February.
