Wholesale power prices saw both winter, summer spikes in 2018, EIA reports

Wholesale electricity prices were 14 to 60 percent higher in 2018 at major U.S. trading hubs than in the previous year, according to the U.S. Energy Information Administration (EIA).

The Midwest Independent System Operator (MISO) saw the lowest spike, while Texas’s Electric Reliability Council (ERCOT) market saw the highest. Peak period wholesale electricity prices were seen in both the hottest and coldest months of the year. During July, monthly prices leaped to $112/megawatt hour, compared to the $36/MWh they were in the same period of 2017. The majority of the western United States was similarly stricken by record-high electricity demand that was further strained by rising natural gas fuel costs.

During July, monthly wholesale prices for the California ISO area hit an average $101/MWh — the highest since 2009.

Winter was just as harsh, as a result of colder-than-normal weather and constrained natural gas supplies during the first weeks of January. The chill hit the middle Atlantic and eastern Midwest hard, averaging $73/MWh in January. For the most part, however, Midwestern markets were the most stable of regions that year.

Despite the issues, the year saw an influx of new natural gas-fired capacity as coal plant retirements continue unabated. By year’s end, natural gas fueled an estimated 35 percent of the total U.S. electricity generation — a 3 percent gain over the previous year. Coal declined 3 percent, while wind and solar reached a combined share of 9 percent. Hydroelectric held steady at around 7 percent.