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February 22nd, 2013

High Wholesale Electricity Prices In New England: When Should Consumers Expect Relief?

by Andrew Price, President & COO

Wholesale power prices in New England have been extremely high this winter. Electric commodity prices in the real-time and day-ahead markets are near 10 cents per kWh on average and have exceeded 70 cents per kWh at times. This compares to an average of less than 4 cents per kWh last January and February. The cause of high prices is not a mystery; New England’s heavy dependence on natural gas for power generation is in conflict with the region’s growing demand for natural gas as a heating and process fuel. Coupled with inadequate infrastructure to import natural gas from outside the region and some key outages at New Brunswick Canada natural gas production facilities, the fuel shortage is creating persistently high electricity prices.

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