During 2017, wholesale electricity prices at major trading hubs in the eastern United States changed little from 2016, while average monthly wholesale prices in California and Texas increased, according to the U.S. Energy Information Administration (EIA).
Prices in California increased by 18 percent and by 27 percent in Texas.
Limited volatility in natural gas fuel prices contributed to the stable wholesale electricity prices, although heat waves in late summer caused short-term price spikes in some western markets.
Average peak day-ahead wholesale electricity prices in PJM Independent System Operator (ISO) regions averaged $34 per megawatt-hours (MWh) in 2017, 1 percent less than in 2016.
ISO New England’s 2017 average annual wholesale price of $38/MWh was just 7 percent higher than the 2016 average, although prices spiked to $75/MWh in December.
High temperatures in the summer in California resulted in periods of high electricity demand. Wholesale prices during peak hours averaged $55/MWh in August, 42 percent above prices during the same month in 2016. On Sept. 1, day-ahead electricity market prices in the California ISO exceeded $200/MWh for four hours and hit $770/MWh in one hour.
The monthly average price of natural gas delivered to U.S. electric generators peaked at $4.14 per million British thermal units (MMBtu) in January 2017. During the second half of the year the average price stayed between $3.10/MMBtu and $3.30/MMBtu.
The continued low cost of natural gas made it the leading energy source for the second year in a row.
According to EIA estimates, natural gas-fired power plants provided an average of 32 percent of total U.S. electricity in 2017, while coal-fired power plants supplied 30 percent. Natural gas’ share of generation decreased slightly from a 2016 average of 34 percent, as generation from renewable energy continued to increase.
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