NY Summer Electricity Prices Should Remain Flat
The New York Public Service Commission (PSC) issued a press release on May 14 forecasting that power providers have sufficient resources to meet peak demand this summer. This should cause wholesale power prices to stay flat in New York State from June through September compared with last summer thanks to demand-side management and price hedging efforts. New York typically sees demand of about 33,000 MW, but set a record of 33,955 MW in 2013, narrowly surpassing its 33,939 MW set in 2006.
According to the Energy Information Administration, New Yorkers pay the fifth highest residential retail electricity prices on average. In February, the most recent month reported, New York’s electricity prices were 8.4 percent higher this year than last year across all electricity sectors. Summer energy price dynamics in New York, however, are very different from winter dynamics. In the winter, gas is used extensively for both heating and electricity, and gas transmission constraints have led to spiking natural gas and wholesale electricity prices in recent years. In the summer, gas is primarily used for electricity generation. Summer power price risks result from increased air conditioning on hot days and constrained ability to generate and transmit enough power into densely populated areas like New York City.
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