Energy Markets Today: September 14, 2018

Sep 14

Forward energy markets

Just a heads up to customers up and down the east coast, energy markets are up. Power markets are up over the last several months. Take a look at the Zone J (NY City) forward curve.

Forward markets are trending up in NY's Zone J

Source: MWh Software

This trend began last Spring when the NY Independent System Operator announced an intention to price carbon in the State starting in 2021. The ISO released a straw proposal on the plan in April 2018 (see that proposal here). While this increase in prices may look dramatic (from a low of $43.18 for on peak power in February 2018 to today’s price of $48.19), keep in mind that markets have been low and relatively stable for the past 24 months.

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Day ahead prices

Despite some volatility in forward markets and some price spikes during the month of January, day ahead prices have been relatively tame. Across the state of New York, for example, day ahead prices have seen little volatility.

day ahead prices have been relatively stable

Source: NYISO Monthly Market Operations Report July 2018

For more information on volatility and what it means to you, here is an article from MWh’s news files.

Bottom line for energy purchasers and finance experts: Keep in mind that both forward and day-ahead markets have been low and not volatile for several years. Keep all this information in context.

Evaluate your budgets and review your costs compared to the market. Be aware of how your prior assumptions about budget and cost might change with new market information. Then, be prepared to act. 

If you have concerns or would like to talk about how markets impact your budget, give us a call.

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