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New England saw record low wholesale electricity prices since the wholesale market became deregulated and opened up to competition 12 years ago. The New York Independent System Operator (NYISO) has reported that New York saw an average 7% decrease in wholesale prices in 2012 from the previous year. Connecticut and Maine saw prices drop by 23% from 2011.
Wholesale price declines stem from both increased generation capacity as well as cheap natural gas that can be converted into electricity at power plants. Most of the new capacity stems from these gas-fired plants and wind generation plants, both considered as cleaner alternative fuels to traditional coal.
Electricity consumption has also gone down in New England, due to reduced use stemming from the latest economic recession, the use of more energy-efficient appliances, and the mild winter weather over the past few years.
When retail electricity providers are able to purchase wholesale electricity at lower prices, cost savings can be passed onto customers through lower electricity rates. Of course, customers must shop around for these providers on their own.
