U.S. power prices steady, holding sharp declines from earlier this year

WASHINGTON, D.C., Oct. 24, 2001 – Wholesale U.S. power prices are holding steady in most of the country, maintaining the steep declines from earlier this year, as cooler temperatures and less demand balance out the loss of generation due to seasonal maintenance, a new energy report indicates.

The average day-ahead on-peak spot prices for Into Cinergy, the most actively traded power hub in the country and key Midwest delivery point, slipped $1.23 to $20.81 megawatt-hour (MWh) over the last month and are down $14.75/MWh from a year ago, according to Platts.

In the East, spot prices for the Mid Atlantic at PJM West came off $1.72 to $25.23/MWh, down $14.32/MWh from last year, and New England fell $10.90 this month to $38.49/MWh, and is down $28.82/MWh from October 2000.

In the south central part of the country, Into Entergy prices rose $1.23 to $20.60/MWh, but are still down $23.88/MWh from last year at this time. Prices for ERCOT, the delivery point for Texas, moved up $1.95 to $22.59/MWh, but are nonetheless down $31.91/MWh from a year ago.

Western U.S. prices have been climbing in the last few weeks with the unexpected outages of two regional nuclear power plants for repairs. However, the impact of those outages has been muted by seasonally weak demand, and prices are still well below the $91.87/ MWh federally mandated Western price cap.

Spot prices at Palo Verde, the key Southwest delivery point and the most actively traded power hub in the West, rose $3.93 to $27.25/MWh, but are still far lower than the $85.67/MWh reached last year. Spot prices at Mid-Columbia, the chief Northwest trading hub, moved up $7.35 to $27.26/MWh, yet are way down from the $102.50/MWh level from last year.

“Lower natural gas prices have made the biggest difference in spot power markets,” said Mike Wilczek, Platts market specialist. “Gas prices were very steep last year, driving up power prices all over the country. New generating plants and conservation efforts have also had a mitigating impact, particularly in the West.”

Additional information is available at www.platts.com and www.plattsmetals.com.

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