Northeast US power gen mix still malleable as winter approaches

Winter is around the corner and for regions like the Northeast it can mean a shifting power generation picture. And because the Northeast has increasingly turned to natural gas for its generation needs as older power plants have retired, it further puts Northeast power prices at the whim of natural gas prices. This is nothing new to stakeholders in the region. During past winters, spot natural gas prices, and therefore power prices, have become extremely volatile as generators compete with residential and commercial customers for the substance in the pipes. To cope with, or avoid, these episodes of volatility, some dual-fueled generators switch to fuels that are more economical at the time, such as fuel oil, to produce electricity. Looking at data for the months of January and February going back to 2011, oil-fired generation contributed between less than 1% to as much as 27% of the daily ISO New England generation mix. Since 2013, the ISO-NE has operated a winter reliability program, developed as a way to help incentivize these generators that switch to ensure proper fuel inventory levels heading into the winter season. The program pays the generators a portion of fuel costs related to any unused inventory levels

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Source: CTRM Center

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