Region's electrical grid feeling strain of cold-weather demand
Peak demand was expected to reach 21,400 megawatts Tuesday night, compared to the previous winter peak for the year of 20,887 on a frigid Jan. 24, according to ISO-NE, the independent system operator.
At one point during the day on Tuesday, ISO-NE asked for a delay in routine maintenance or testing that could affect power generation or transmission on the grid.
The price for one megawatt hour of electricity in the real-time power market hit $1,000 at one point early Saturday evening, compared to a 12-month average of $36 in 2012. Fortunately for consumers, utilities that provide electricity for residential use purchase long-term contracts for electricity and do not rely on the spot market.
"The only consumers who end up paying that spot price are large industrial or commercial facilities that decide to ride the spot market," said Dan Dolan, president of New England Power Generators Association.
While not affecting consumers in the short term, such spikes in the cost of electricity on the wholesale market do affect the averages that determine utility pricing in the long run, which is one reason all three regulated utilities in the state have raised their energy supply charge for 2014.
"Investment in the gas pipeline infrastructure that brings cheap Marcellus (shale) gas into the region has not been sufficient to cope with the increased demand from natural-gas-fired generators, creating serious risks to grid reliability," wrote van Welie.
Utilities that provide gas to heat homes and businesses buy up the space on those pipelines. Most of the year, there is enough room left over for the gas-fired power plant owners to get the gas they purchased on the spot market delivered into New England.
"Enhancements to the short-term ISO markets alone won't necessarily spur pipeline construction, because pipeline developers require long-term contractual commitments," he wrote. "New England's state regulatory bodies are keenly aware of these issues, and are discussing a range of solutions, including the possibility of a regional investment in additional pipeline infrastructure."
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