FERC: Nation's electricity grid performed well this winter

Dive Brief:

Despite a tough winter, moderate gas prices and lower forced outage rates helped keep electricity prices moderate this season, according to analysis by FERC.
That stands in stark contrast to last winter, when outage rates were high and price spikes were common, according to a "2014 State of the Markets" presentation given last week.
Across regional grid operators, FERC said there were no significant outages or major operational issues reported and the bulk electrical system performed well despite changes to the resource supply mix..

Dive Insight:

What a difference a year makes.

That's the upshot of a market analysis given by FERC last week, pointing out that electricty and gas markets peformed significantly better this past winter.

"The contrast between last year's and this year's winter cannot be understated," according to a commission analysis. "While no single reason can explain why the wholesale power markets performed better this winter, the relative improvements seen in terms of prices and operations are likely the result of several factors."

Among the big differences contributing to moderate power prices, FERC said: "Electric transmission and natural gas pipeline operators are now communicating more effectively during periods of stress to improve coordination and the reliability of their systems." But record natural gas production also helped, as did plentiful storage inventories, new pipeline infrastructure, and low oil prices.

Markets are also continuing to adjust to a change in generation mix, FERC said, as coal plants retire and new natural gas and renewable generation enters service.

The spot natural gas price at Henry Hub averaged $4.32/MMBtu in 2014, 16% higher
than in 2013. Prices were on average 14% to 43% percent higher at key hubs throughout the
country, FERC said. Although prices began to moderate in the spring, concerns about low storage inventories kept prices up until early summer. Prices fell in the fall as storage recovered, and by late December, the Henry Hub price was below $3/MMBtu, FERC said.