Electricity prices expected to drop in 2019

Written by Susan Phillips/StateImpact Pennsylvania | Jun 1, 2016 7:35 AM

Photo by AP Photo/J. Scott Applewhite

(Undated) -- Today marks the start of summer for the electricity generator, when demand for power runs high and heat waves put extra pressure on the grid.

But natural gas will be playing a larger role in helping to ease the crunch.

PJM Interconnection, which operates the grid, runs an annual electricity auction that sets a baseline price for electricity three years ahead.

Spokesman Ray Dotter says prices will be down in 2019 down, in part, because of new plants fired by natural gas coming online.

"There was a large amount of new natural gas plants that offered in, and they tend to have lower capital costs than larger plants like coal and nuclear," he says. "Natural gas plants, because of the lower cost of natural gas as a fuel, tend to be much more competitive than the existing large plants like coal and nuclear."

The clearing price at the auction was surprisingly low this year and that could mean a drop in future prices for consumers.

Pennsylvania is part of the largest power grid in the nation, which includes 13 states and the District of Columbia.


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