December marked a return to energy prices not seen since 2009, MISO officials reported during Tuesday’s Markets Committee of the Board of Directors meeting. December’s average day-ahead and real-time energy prices were the lowest since MISO implemented the ancillary services market in January 2009.
“December was a relatively mild month,” said David Patton, MISO’s Independent Market Monitor. “The most notable thing that happened this month is the continued low gas prices… In addition to gas prices dropping, oil has continued to drop.”
Patton said languishing prices were driven by low loads, low natural gas prices, strong wind output and the return of nearly 15 GW of generation from the fall outage season.
December’s average real-time energy price was $21.23/MWh, representing a 31% drop when compared to December 2014. Load averaged 72.6 GW, which was lower than last December’s average of 76.6 GW. On Dec. 17, load peaked at 87.1 GW, down from last December’s peak of 93.1 GW.
Wind power alone produced 4,133 GWh, almost double the 2,461 GWh needed to satisfy combined state renewable portfolio standards.
Todd Ramey, vice president for system operations and market services, said temperatures in the footprint were 5 to 8 degrees above normal during December. He said unusually high temperatures complicated day-ahead forecasting and led to a mid-term load forecast that exceeded the 2% error threshold for eight days during the month.
The low energy prices caused capacity factors of coal-fired resources to drop to 45%, down from December 2014’s 60%. Patton said the reduced utilization could accelerate coal retirements. “We’re seeing some pretty significant changes in terms of types of dispatches,” Patton said.
— Amanda Durish Cook