Cheaper natural gas drove Q3 ISO New England markets

Natural gas prices and demand drove market outcomes in the third quarter in the ISO New England region, with natural gas prices during the period averaging $3.61/MMBtu, a 21% drop from the third quarter of 2011.

Net energy for load (NEL) in the third quarter was 35,689 GWh, approximately 0.5% higher than the 35,021 GWh load in the third quarter of 2011. Peak load during the third quarter was 25,853 MW and occurred on July 17.

That is according to a new report from the Internal Market Monitor (IMM) of ISO New England, which was filed Nov. 15 at the Federal Energy Regulatory Commission. The IMM publishes a Quarterly Markets Report that assesses the state of competition in the wholesale markets operated by the ISO. The report addresses the development, operation, and performance of the wholesale electricity markets administered by the ISO and presents an assessment of each market based on market data, performance criteria, and independent studies.

In the third quarter, the average real-time Hub price was $39.51/MWh, down from $48.21/MWh in 2011. “This price is consistent with observed market conditions including natural gas prices, loads, hydroelectric production, and other available supply,” the report said. “Price differences among the load zones stemmed primarily from marginal losses, with little congestion at the zonal level. Congestion was restricted primarily to smaller, more transient load pockets that formed when transmission or generation elements were out of service.”

In the third quarter, New England was a net importer of power. Net imports from Canada exceeded net exports to New York. Net interchange with neighboring balancing authority areas totaled 2,770 GWh for the third quarter, a 2% decrease compared with the previous quarter.

Average fuel prices in ISO New England for the comparable periods were:

  • Natural gas, $3.61/MMBtu Q3 2012, $2.76/MMBtu Q2 2012, and $4.57/MMBtu in Q3 2011.
  • No. 6 Oil 1%, $16.92/MMBtu in Q3 2012, $17.03/MMBtu in Q2 2012 and $16.31/MMBtu in Q3 2011.
  • No. 2 Oil, $21.58/MMBtu in Q3 2012, $20.90/MMBtu in Q2 2012 and $21.48/MMBtu in Q3 2011.
  • Low Sulfur Coal, $2.55/MMBtu in Q3 2012, $2.32/MMBtu in Q2 2012 and $3.08/MMBtu in Q3 2011.
  • High Sulfur Coal, $2.44/MMBtu in Q3 2012, $2.25/MMBtu in Q2 2012 and $2.97/MMBtu in Q3 2011.

Out of the total generation in the ISO New England region in the third quarter, gas made up 48%, up from 45% in the year-ago quarter. Nuclear was 27% in the latest third quarter, down from 29% in the third quarter of 2011. Coal was 3% in this latest quarter, down from 4% in the third quarter of 2011. Coal/oil, a separate category, went from 1% in the third quarter of 2011 to zero in the third quarter of this year. Hydro went from 5% in the third quarter of last year, to 4% in the third quarter of this year.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.