US POWER TRACKER: NYISO forward prices rise above $200/MWh this winter

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New York Independent System Operator power and natural gas prices were flat to lower year on year in October and declined from September at all major hubs, but forward power prices have risen above $200/MWh at some locations.

"On-peak NY-J power prices are expected to average $161/MWh for November-March, an increase of $22/MWh from last month's forecast, driven largely by a substantial increase in expected on-peak implied heat rates for the same period," S&P Global Commodity Insights power market analysts said in a recent research note.

NYISO on-peak day-ahead Zone J New York City power prices averaged $61.76/MWh in October, about 3% above the October 2021 average of $59.81/MWh and about 30% lower than September. Real-time on-peak power prices at the hub followed a similar pattern.

Zone G Hudson Valley on-peak day-ahead power prices averaged $58.02/MWh in October, roughly 1% higher on year and about 31% lower than in September.

NYISO Zone A on-peak day-ahead power prices averaged $44.90/MWh in October, nearly 10% lower on the year and about 35% lower on the month. Real-time on-peak power prices at the hub were about 15% lower on year and 32% lower on month.

Transco Zone 6 spot natural gas prices averaged $4.70/MMBtu in October, which was about 3% higher on year and nearly 30% lower on month, according to S&P Global data.

"Delivered gas prices are expected to remain elevated(opens in a new tab) through the remainder of the year and into next year," according to the research note.

NYISO power demand dropped 14% on the month, with peakload averaging 17,155 MW in October compared with an average September peakload of 19,983 MW, according to grid operator data. Average peakload was down 4% on year in October.

The average normal temperature in NYISO territory in October is 56.6 degrees Fahrenheit, according to CustomWeather data. The average high temperature in October was 62.8 F compared with an average September high of 74.5 F.

The average October low temperature was 48.1 F compared with an average September low of 60.4 F. The lower temperatures increased average heating degree days from 1.8 in September to 9.1 in October and decreased average cooling degree days from 3.7 in September to zero in October.

Power generation fuel mix

Gas-fired generation averaged 6 aGW for October, according to S&P Global, and overall gas generation market share is expected to climb to 49% in 2022 from 48% in 2021.

Gas-fired power generation accounted for 26.5% of the NYISO fuel mix in October, down from 28.7% in September and 27.4% in October 2021, according to NYISO data.

Dual-fuel units, which typically run on gas with a backup fuel like oil, accounted for 22.9% of the October fuel mix, down from 24.8% in September and up slightly from 22.1% in October 2021.

Nuclear power accounted for 22.9% of the October NYISO fuel mix, up from 19.2% in September and 21.7% in October 2021.

Hydropower's share of the fuel mix was 21.2% in October compared with 22.3% in September and 23.5% in October 2021. Wind power increased to account for 4.4% of the October fuel mix, up from 2.7% in September and 3.5% in October 2021.

Forward power, gas prices

Zone G on-peak forward power prices for November averaged $81.21/MWh in October trading, up almost 19% on the year and down about 29% on the month, according to Platts M2MS data. Forward power for December averaged $122.22/MWh, up almost 24% on the year, and forward power prices for January 2023 averaged $202.41/MWh, which was about 49% higher on year.

NYISO Zone J on-peak forward power prices for November averaged $86.62/MWh in October trading, roughly 19% higher on year. Forward power prices for December averaged $131.17/MWh, up about 26% on the year, and forward power for January 2023 averaged $213.74/MWh, about 45% higher on the year.

Transco Zone 6 forward gas prices for November averaged $5.68/MMBtu in October trading, up nearly 6% on the year and down almost 24% on the month. Forward gas prices for December averaged $9.34/MMBtu, about 20% higher on year, and forward gas prices for January 2023 averaged $16.56/MMBtu, nearly 37% higher on the year.

"Elevated winter gas pricing remains a primary driver of elevated annual power price expectations, with gas prices for the winter (November-March) expected to average $12.40/MMBtu," the S&P Global analysts said.