Electricity Rates Continue to Drop Thanks to Natural Gas

Electricity Rates Continue to Drop Thanks to Natural Gas

As blogged about in previous entries, the relationship between natural gas and electricity is pretty simple: electricity prices mirror the gas market. Lately, a shale-driven glut of natural gas has cut electricity prices for the U.S. power industry by 50 percent.

According to a Jan. 11 research report by Aneesh Prabhu, a New York-based credit analyst with Standard & Poor’s Financial Services, LLC , electricity prices have dropped more than 50 percent on average since 2008, and about 10 percent during the fourth quarter of 2011. Prices in the west hub of PJM Interconnection LLC, the largest wholesale market in the U.S., declined to about $39 per megawatt hour by December 2011 from $87 in the first quarter of 2008.

Natural gas for February delivery recently traded 13.1 cents, or 4.9%, lower at $2.539 a million British thermal units on the New York Mercantile Exchange.

The benchmark contract had fallen as low as $2.533 in earlier trading, closing in on the September, 2009, settlement of $2.508/MMBtu. A settlement below that level would be the lowest since 2002.

Now is a great time to lock-in to a low electricity rate for your business. Don’t have the time to look around? No problem. By partnering with an electricity broker company like Live Energy, we make it easy to find the best rate and plan for your business. To ask questions and know your options, give one of our certified energy advisors a call today at 877-810-7700.

Natural Gas2.539
Crude Oil98.70
Heating Oil3.0272
RBOB Gas2.7342




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