Wholesale power prices in the US continued to retreat in May alongside lower natural gas prices and less peak demand.

For the Lower 48 states, on-peak spot power prices were down 62.52% year over year to an average of $28.82/MWh at the end of May, according to S&P Global Market Intelligence data. Prices in the California ISO saw the largest percentage decline, falling 69.21% from May 2022 to an average of $18.24/MWh.

On a monthly comparison basis, prices declined 23.34% from April, with regional changes ranging from a 72.84% drop in the West to a 25.86% increase in the Southwest Power Pool.

Overall spot natural gas prices in organized US markets slipped 11.01% month over month to $1.942/MMBtu in May. Year over year, spot natural gas prices for the lower 48 states were down 74.66% from May 2022, led by the New York ISO where prices were down 78.25% from a year ago.

Across all US organized markets, gas-fired implied heat rates — the rate at which the market cost of power equals the cost of burning natural gas to generate electricity, also known as spark spreads — rose 47.91% from the prior year to 14,838 Btu/kWh in May. The Southwest Power Pool saw the largest year-over-year increase at 88.05% to 17,135 Btu/kWh, followed by the New York ISO at 73.03% to 14,727 Btu/kWh.

Coal-fired implied heat rates in Central Appalachia and the Powder River Basin declined year over year in May. Compared to the previous month, implied heat rates were up for Central Appalachian coal but fell for Powder River Basin coal.

Year-over-year changes in monthly peak demand in organized markets in the US and Canada ranged between a 3.2% increase in Alberta and a 26.9% decline in the New York ISO.

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