After three record-high winter months, the price of wholesale electricity in New England dropped nearly 70 percent in April, according to grid administrator ISO New England.
The April plummet comes after January, February, and March had all-time highs in their respective months for average wholesale prices. The cost spikes primarily were driven by constraints in the supply of natural gas, which is fuel used in 46 percent of New England power plants.
The real-time wholesale price of electricity in April was $41.20 per megawatt hour vs. the $116.12 per megawatt paid on average by the region as a whole in March. Demand for more electricity in the winter months also contributed to the higher price in March.
The April price also was 3.5 percent lower than the average price in April 2013. This was primarily driven by the lower cost of natural gas compared to a year ago, as demand during the month was roughly the same.
The wholesale price of electricity is one of the main factors impacting ratepayer bills. However, utility companies and most competitive electricity suppliers buy and sell their power on long-term contracts, so the price fluctuations have only an indirect impact.
