Rensselaer, N.Y., March 11, 2010 — New York State’s average wholesale electric energy price for 2009 was the lowest in a decade of history of New York’s marketplace for electricity.
“This is further evidence that New York’s competitive marketplace for electricity is working as designed,” said NYISO President and CEO Stephen G. Whitley. “Since 2000, competitive markets in New York have contributed to an 18 percent reduction in fuel-adjusted wholesale power costs.”
The declining wholesale electricity energy prices in 2009 were largely attributable to reduced power consumption and reductions in the cost of natural gas, which is used to fuel a significant portion of New York State’s electricity supply.
“New York’s competitive markets motivate power producers to pass their cost savings onto the market. The results speak for themselves, as cost savings from lower natural gas prices and reduced demand for electricity translate into lower wholesale electric energy prices,” Whitley explained.
Lower demand for electricity permits a larger proportion of electricity to be generated by more efficient and less costly facilities.
Average daily electricity usage in New York State was down in 2009, averaging 435 gigawatt-hours per day (GWh/day), down 3.7 percent from the 2008 average of 452 GWh/day.
While the slowing economy and expanded conservation programs reduced energy usage, unseasonably cool summer weather also played a role in decreasing power consumption by New Yorkers in 2009.
A prominent portion of power plants in New York burn fossil fuels to generate power, and the costs of such power plants are highly influenced by the prices of natural gas and oil. The average annual cost of natural gas was $4.87/MMBtu (one million BTUs) in 2009, down from $10.13/MMBtu in 2008.
Power plants fueled by natural gas or dual-fuel units that use natural gas or oil provide two-thirds of the electric generating capacity in New York State.
The NYISO is a not-for-profit corporation that began operations in 1999. The NYISO operates New York’s bulk electricity grid, administers the state’s wholesale electricity markets, and conducts comprehensive planning for the state’s bulk electricity system.