NEW YORK, Aug. 30, 2001 – Despite earlier dire predictions of blackouts and price spikes for this summer, power prices in the Western U.S. are now down more than 60% from year-ago levels.
Outside the West, prices are stable in the Midwest compared to summer 2000. In the Middle Atlantic region prices are 36% above year-ago levels and nearly 40% higher in New England, Platts reported.
In the West, prices have only once risen to the $91.87/megawatt-hour (MWh) federally mandated Western price cap this summer as mild weather, generation additions and conservation eased supply and demand pressures.
Day-ahead prices at Palo Verde, the most actively traded Western power hub, averaged about $59.75/MWh through July and August, far below the $179.79/MWh for third-quarter 2000. Commonly traded Palo Verde Q3 packages sold for more than $500/MWh back in April as market players attempted to protect themselves from price spikes.
The 2001 Q3 average is likely to fall further, with September usually the lowest priced month of the quarter because of cooler average temperatures. Full month prices for September Palo Verde are currently in the mid-$30/MWh range. The average daily price for Palo Verde during Q3 1998 and 1999 was $45.12/MWh and $39.28/MWh, respectively.
While prices east of the continental divide are higher than last year, only New England set records. The average price during July and August was about $75.23/MWh in New England, compared to $53.85 in the year-ago period and the previous record of $54.20/MWh in 1999.
Prices in the Mid-Atlantic region at the PJM Western hub for July and August were $59.73/MWh, compared to $43.94/MWh in 2000 and $95.29/MWh in 1999. The Into Cinergy hub in the Midwest saw July and August prices averaging $44.02/MWh compared to $42.84/MWh in 2000 and $185.63/MWh in 1999.
These and other Platts energy prices can be charted at no cost at www.platts.com.