New York PSC expects winter power, gas prices below five-year average

The New York State Public Service Commission said Oct. 13 that it expects to see natural gas and power prices this winter that are below the five-year historical average.

The PSC said in a news release that prices are, however, expected to be higher than last winter, which was extremely mild.

While bill impacts will vary by utility, natural gas bills in general are projected to be slightly higher this winter compared to last winter because last winter was much warmer than normal, but much lower than the historical average.

“The utilities serving New York State have adequate electric supply, natural gas supply, delivery capacity and storage inventory to satisfy current firm customer demands under severe winter design conditions for this winter,” said PSC Chair Audrey Zibelman.

PSC staff has reached out to the major dual-fuel generation owners and found that they are continuing the lessons learned from the 2013/2014 winter.

These primarily include topping off their respective fuel oil storage tanks pre-winter, making firm arrangements for fuel oil replenishment as needed, and ensuring that plant equipment has been prepared for winter operations.

On the electric side, this winter’s (December through March) commodity prices statewide are protected to be higher than last winter, but lower than the historical average, although commodity prices can vary significantly due to weather and other conditions.

On average, a residential customer using 600 kWh per month is expected to pay about $41 per month, or about 14 percent less than the five-year historic average, but the amount will vary by utility. The average residential customer using 700 therms of natural gas can expect to pay about $693, or about 10 percent less than the five-year historical average, but again, the amount varies by utility and with the weather.

A colder-than-normal winter will cause usage and bills to increase.

The electric utilities have continued to perform well in reducing the electric supply price volatility of their full service residential customers. The utilities have hedged approximately 70 percent of their estimated statewide full service residential energy needs to protect against unexpected electric market price swings that could occur this winter.

The state’s major energy utilities — Central Hudson Gas and Electric, Consolidated Edison of New York, Corning Natural Gas, National Fuel Gas Distribution, National Grid, New York State Electric & Gas, Orange and Rockland Utilities, PSEG Long Island, Rochester Gas & Electric, and St. Lawrence Gas — expect to have adequate supplies on hand.

Nationally, the Natural Gas Supply Association (NGSA) issued a report earlier in October that said colder weather and greater demand for natural gas than last winter are expected to place upward pressure on gas prices compared to last winter.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.