Did you know … Energy prices are at the lowest level since 2002; however, some customers may see increased capacity costs on monthly electricity bills. Capacity values have been announced through June 2019 in the PJM territory, which covers all or parts of 13 Midwest and Mid-Atlantic states.
- The national benchmark price for retail electricity dropped last week to 0.0736 per kilowatt hour. Pennsylvania experienced the biggest drop in electricity prices last week, followed by Maine and Delaware.
- One of the strongest El Niño weather patterns ever recorded is causing above-normal temperatures in key consuming regions of the U.S., tempering demand for heating. Power prices are near the same low level as 2012, and have not been lower since 2002.
- Capacity costs increased on June 1, 2015, for many electricity customers in the PJM territory, which includes 17 electricity utility regions. Most of these regions will see capacity costs decrease on June 1, 2016, and then increase again on June 1, 2017.
PJM Capacity Costs
- The January 2016 NYMEX natural gas contract price today is $2.04 per million British thermal units.
- Last week, the U.S. Energy Information Administration (EIA) reported the first storage withdrawal of the season, which was 53 billion cubic feet (Bcf). Record-high storage levels are now at 3,956 Bcf.
- Mild temperatures, record-high storage levels, and high production levels are expected to continue driving down gas and power prices.
- The January 2016 crude oil contract today is $36.75 per barrel.
Long-Term Market Drivers
- Gas storage inventory: Inventories in November 2015 set the all-time record of 4,009 Bcf. Storage levels remain a key driver of electricity and natural gas prices.
- Environmental concerns: As U.S. Environmental Protection Agency rules go into effect to limit power plant emissions, many generators are switching from coal burning to natural gas burning. This is an important factor that puts upward pressure on electricity and natural gas prices.
- Weather: Experts are keeping an eye on stronger-than-normal El Niño weather patterns, which could cause a milder-than-normal winter in key heating demand regions.