The average price of wholesale electricity in New England hit a historic 12-year low in June, coming in 23 percent lower than the previous record low, according to regional grid administrator ISO New England.
A combination of mild weather, low demand and the lowest average natural gas price since 2003 led to an average electricity price of $19.61 per megawatt hour in June, the lowest since ISO started keeping track 12 years ago. The previous record low was $25.39 per megawatt hour set in March 2012.
The commodity price of natural gas for the region was $1.68 per million Btus in June. Since natural gas fueled power plants generated more than half of the electricity in New England, the price of wholesale power typically follows the price of natural gas.
Wholesale power is just one component of ratepayer bills, though, which also include items like transmission and distribution, taxes and fees. Low power prices likely won’t impact most Connecticut customers for at least six months.
The record low in June came coincidentally the same month that Connecticut’s legislature did away with the one tool ratepayers had to take advantage of low monthly wholesale prices: variable rate contracts. Under variable rate agreements with alternative energy suppliers, ratepayers could negotiate a rate that change each month as wholesale prices rose and fell.
However, some alternative suppliers used variable rate contracts to lock customers into long-term deals where ratepayers had little control over the rates they paid. Variable rates also left customers susceptible to significant increases in wholesale power prices, such as in February, which had the third highest wholesale prices on record. Connecticut is the first state to ban variable rate contracts.
