US POWER TRACKER: ISO-NE power, gas prices surged around Christmas holiday

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ISO New England wholesale power and natural gas prices spiked considerably around the Christmas holiday when temperatures across the country plummeted, driving up demand, with oil-fired generators delivering 34% of electricity supplies during the peak hour of Dec. 24.

ISO-NE Internal Hub on-peak day-ahead power prices averaged $122.94/MWh in December 2022, about 74% higher on year and 89% higher on month, according to ISO data. Real-time on-peak prices at the hub averaged $130.79/MWh, which was around 110% higher on year and 82% higher on month. Daily average real-time on-peak prices peaked at $583.64/MWh on Dec. 24 amid the cold weather.

Scarcity conditions On Dec. 24 were triggered between 4:40 pm and 6:05 pm. Temperatures that day in Boston, for example, were below 20 Fahrenheit lower than the initial forecast. The cold weather, which affected much of the US, contributed to the grid event, with consumer demand for electricity peaking at 17,524 MW during the 5 pm hour.

Real-time energy prices in ISO-NE briefly spiked to $2,816/MWh around 5 pm and averaged $2,200/MWh over the course of the operating hour.

Boston Hub on-peak day-ahead power prices averaged $122.93/MWh in December, about 68% higher on year and 87% higher on month. Real-time on peak prices averaged $131.16/MWh for the month, with a daily average peak of $587.32/MWh on Dec. 24.

Connecticut Hub on-peak day-ahead power prices averaged $120.86/MWh in December, around 89% higher on month and 84% higher on year. Real-time on-peak prices averaged $129.09/MWh for the month, with a daily average peak of $576.11/MWh on Dec. 24.

On-peak Algonquin city-gate natural gas prices averaged $13.96/MMBtu in December, up almost 145% higher than the November average of $5.71/MMBtu. Gas prices at the hub spiked to $34.90/MMBtu from Dec. 24 to Dec. 27 before dropping back to $5.41/MMBtu on Dec. 29.

The average low December temperature in ISO-NE territory was 29.3 degrees F compared with an average November low of 39.9 degrees F, according to CustomWeather data. The lowest daily average temperature in December was 11 F which was reached on Dec. 24.

The colder weather increased average heating degree days from 17.5 in November to 29.3 in December.

The cooler temperatures increased ISO-NE power demand with peakload averaging 16,284 MW in December, 10.1% higher than the November average of 14,795 MW. Peakload reached a high of 17,382 MW on Dec. 24. Power demand was 0.5% higher in December 2021 than December 2022.

Power generation fuel mix

Gas-fired power generation accounted for 43.8% of ISO-NE's December fuel mix, down from 49.3% in November and 48.2% in December 2021, according to grid operator data.

Nuclear power accounted for 29.1% of the fuel mix in December, down slightly from 29.8% in November and 30.2% in December 2021.

Hydropower supplied 11% of the December power generation mix, up from 7.9% in November and 8.3% in December 2021.

Wind power accounted for 5.3% of the fuel mix in December, up from 5.0% in November and 4.8% in December 2021.

Residual fuel oil, captured in the "other" category, increased significantly during the Christmas cold snap, with oil-fired generators delivering 34% of electricity supplies during the peak hour of Dec. 24. Oil-fired generators accounted for just 0.2% of the region's generation in 2021.

Forward power, gas prices

Forward power prices remained elevated on year in December trading with prices dropping by March 2023.

Mass Hub on-peak power prices for January 2023 averaged $240.74/MWh during December 2022 trading, down about 4% on month and up around 39% on year, according to Platts M2MS data. Forward power for February averaged $233.53/MWh, down nearly 5% on month and up about 39% on year, and forward power for March averaged $136.96/MWh which was up about 38% on year and down 4% on month.

Forward Algonquin city-gate gas prices for January averaged $30.40/MMBtu in December trading, up about 4% on month and 44% on year. Forward gas for February averaged $29.16/MMBtu, down about 2% on month and up around 45% on year. And forward gas prices for March averaged $15.01/MMBtu, which was down nearly 4% on month and up about 43% on year.