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.
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.
The answer to today’s high rates is in overall demand in a number of connected markets. 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.