Wednesday, January 23, 2013

Cheap Canadian Imports contribute to historic low New York electricity prices

A report out of New York state notes 2012 had the lowest electricity price in years - and then speculates on the reasons of low 2012 pricing, and the cause of high rates today.

New York’s electricity prices reach historic lows - The Buzz: Business news - Capital Region business, industry news - timesunion.com - Albany NY:
The average price of wholesale electricity in New York state last year was the lowest recorded since the advent of a competitive power market 12 years ago.
The New York Independent System Operator, a nonprofit collaborative that runs the state’s wholesale electricity markets, says the average price per megawatt hour of electricity in the state was $43.23 last year, more than $5 lower than the previous low set in 2009.
Interestingly, wholesale prices in the Capital Region and all the way down to New York City and Long Island reached $150 per megawatt hour on Wednesday, which is unusual. It is possible that a problem with a transmission line could have caused the spike. The high pricing later spread all the way to the Finger Lakes.
Continue reading at The Buzz: Business news

The answer to today's high rates is in overall demand in a number of connected markets - as I was reminded by the comments attached to a post on my Cold Air blog.  Most significantly, Quebec is setting consumption/demand records today.


The anwer to the low average rates has a lot to do with low natural gas pricing - but cheap imports from Quebec and Ontario are also relevant.  I've graphed some metrics build from data collected from Canada's National Energy Board.  In 2012 approximately 10% of New York demand was met by imports (net) from Ontario and Quebec - at very low rates



1 comment:

  1. Scott,

    Interesting graphs. In 2005, HQ was being conservative, after two bad years in a row, water-wise. And 2010 can easily be explained by the dry year we had. That fall, Quebec bought a lot of power from Ontario to "fill" its reservoirs as you probably recall. I have a graph showing reservoir levels for the last 2 decades (on January 1st, so the shortfall in 2010 is shown as 2011).





    The current trend (higher Q's and lower P's) can partly be explained by Quebec's insatiable appetite for fresh money. These days, the shareholder expects his $2 billion dividend cheque, every April 1st and the boys are under pressure to deliver.

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