Higher natural gas prices pushed up prices for wholesale electric energy in 2013

Pipeline constraints and higher demand pushed up prices for both natural gas and power

Natural gas pipeline constraints and higher demand in New England caused the average price of natural gas to rise 76% in 2013, which in turn pushed the wholesale electric energy price up by 55% over 2012’s record low price. Natural gas is the predominant fuel used to generate the region’s electricity, at about 46% of total generation in 2013, so wholesale power prices tend to track the price of natural gas. Preliminary data show that the wholesale energy price averaged $56.06 per megawatt-hour (MWh) in 2013, while natural gas averaged $6.97 per million British thermal units (MMBtu). The wholesale energy price was 30% lower than the all-time high of $80.56/MWh during 2008.

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