Electricity cost an extra $1 billion in New England in 2010, because of higher fuel prices and higher demand for power.
In its 2010 Annual Market Report, regional electricity grid administrator ISO New England said the all-in price of wholesale electricity rose 12 percent from $7.5 billion in 2009 to $8.5 billion in 2010.
The increase in the all-in wholesale price was led by the higher costs of fuels such as natural gas, fuel oil and coal; a 3.1 percent increase in demand for power; and lower hydroelectric production levels.
“A warmer-than-normal summer, cooler-than-normal winter, and gradual economic recovery resulted in the need to run more expensive units more often last year than in 2009 to help meet peak demand,” said David LaPlante, ISO New England vice president of market monitoring, in a press release.
The increase in 2010 came after 2009 saw a significant decrease in electricity prices because of falling fuel prices and decreased demand for power.
Other factors contributing to the high cost of power in 2010 were a 51 percent increase in congestion along transmission lines due to higher seasonal demand, and a 71 percent increase in reliability costs due to the need to call on higher-cost power plants to produce electricity in order to meet demand.
