Wholesale electricity prices declined nationwide in 2012, EIA says
Originally published January 11, 2013
Average day-ahead wholesale electricity prices were lower across the entire United States in 2012 compared to 2011, the Energy Information Administration said Jan. 9. Lower natural gas prices and generally mild temperatures contributed to the declines in on-peak power prices, the agency said.
Although average electricity prices were down in 2012, brief periods of high temperatures caused short-term price spikes in some wholesale electricity markets, EIA said. A short heat wave in late June caused price increases in eastern electric systems, while high temperatures in August caused elevated prices in ERCOT, the agency said. "These price patterns are typical market reactions to high temperatures in the summer as electric demand increases to meet air conditioning load."
Power prices in the late fall and early winter of 2012 began to increase across much of the country, also following the trend in natural gas markets, EIA said. Natural gas prices were consistently falling throughout the latter half of 2011 and into the summer of 2012.
The price declines ranged from 15 percent (to $31.72/megawatt-hour) in California to 43 percent (to $35.91/MWh) in the Electric Reliability Council of Texas. The large percentage decline in ERCOT was principally because of a return to more typical pricing in 2012 compared to a significant price spike in the summer of 2011, EIA said. The highest average price was in the New York ISO Zone J (the New York City region), at $46.57/MWh, despite a 27 percent decline.
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