NEW ORLEANS — MISO energy prices declined this winter along with loads and natural gas costs in the face of above-normal temperatures, RTO staff said during a March 22 Board of Directors meeting.
Real-time prices in the MISO footprint averaged $21.80/MWh, down 13% from the prior quarter and 29% from the same period a year ago. Average system-wide load fell 2.7% compared with last winter, with seasonal load peaking at 98.2 GW on Jan. 19, well below January 2014’s all-time winter peak of 109.3 GW.
“Part of the ease in making our way through the winter was the relatively mild temperature conditions,” said Jeff Bladen, MISO’s executive director of market design.
Bladen said the higher temperatures and historically low gas prices also reduced revenue sufficiency guarantee payments to “some of the lowest market uplift charges since 2012.” Uplift charges averaged $0.09/MWh, down from $0.23/MWh last winter and $0.46/MWh in 2014.
Natural gas costs should stay low in the near term, said Michael Wander, of MISO Independent Market Monitor Potomac Economics. Prices at both the Chicago City Gate and Henry Hub ended February under $2/MMBtu.
Other winter highlights:
- MISO set an all-time wind output record of 13.1 GW on Feb. 19, surpassing the previous peak of 12.7 GW set a month earlier. For an hour, more than one-fifth of MISO’s power came from wind resources.
- Coal generated 47.7% of electric production, down 25% since 2014. Most retired coal generation has been replaced by gas.
MISO board member Michael Curran said he wanted a review of MISO’s metrics, as so many “boil down to a dollar amount.” He worried that low gas prices could be “masking” uneconomic activity.
MISO Prepped for Summer Demand
MISO officials are concerned about tightening reserve margins despite a preliminary assessment showing that the RTO is comfortably positioned to meet demand this summer.
MISO is projecting an 18.2% reserve margin this summer, exceeding the 15.2% requirement and a slight increase from last year’s 18% margin.
Available supply, however, dropped to 149 GW from 150.3 GW.
MISO CEO John Bear said declining demand contributed to this year’s slightly higher reserve margin. He added that retirements driven by EPA’s Mercury and Air Toxics Standards were on par with the RTO’s predictions.
A final summer analysis will be presented at MISO’s Summer Readiness Workshop in May.
– Amanda Durish Cook
