State Headliners: Labor Day electricity price spikes to $2,454 per megawatt hour

By Guy Page

You may have taken it easy on Labor Day, but our electricity grid worked extra hard to keep the lights on — and boy, does it ever charge for overtime. The wholesale cost of power hit almost $2,500/megawatt hour, almost 100 times the normal cost.

Last week Headliners reported that even $120-180/megawatt-hour solar power (about three times the normal cost) is cheap at the price at least a few days a year when hot weather and high demand send market prices sky-high.

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Guy Page is affiliated with the Vermont Energy Partnership, the Vermont Alliance for Ethical Healthcare, and Physicians, Families & Friends for a Better Vermont.

Labor Day Monday, Sept. 3, provided a stark example. Between 5-6 p.m. the real-time cost of market power in New England hit $2,454 per megawatt hour. If power always cost utilities that much, they would have to pass along the costs to ratepayers, whose average monthly power bill would exceed $10,000.

At moments like these, almost any fixed power contract looks pretty good for Vermont consumers. For example, our utilities pay Hydro-Quebec an estimated $50-70 per megawatt-hour for hydro power comprising about a quarter of Vermont’s demand. They are believed to pay slightly less to Seabrook Nuclear Power Plant in New Hampshire for providing about 15 percent of the state’s power load.

At these times even solar power is looking pretty frugal, if not particularly productive. Solar power operates at peak efficiency between noon and early afternoon, not at 5 p.m. But any amount of $120-$180 per megawatt-hour solar power was looking pretty good at 5:52 p.m., when market power was 15 times as expensive, and heavily dependent on burning oil to boot.

Still, for most of hot, humid, sunny Labor Day 2018, and for most other days of the year, the high cost of solar power would be a tough sell to utilities. However state law requires utilities to buy every kilowatt-hour solar generators can produce.

Like anyone else, utilities and their members/customers don’t like being pushed into a corner and ordered to fork over their money. They’ve found other ways to “shave” (reduce) peak demand.

Maybe you’ve noticed your utility enticing you to install a Tesla Powerwall battery in your basement? As battery prices decline, utilities are now looking less at solar and more at storage for peak shaving. Their idea: instead of filling Vermont’s scenic pastures with thousands of steel and glass solar panels that don’t work that well at 5-6 p.m., why not instead fill Vermont’s residential basements with batteries that do?

You can learn more about Vermont’s renewable energy policy in my first segment on Real Vermont News, a news program produced for Facebook by Rep. Bob Frenier.

Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.

Images courtesy of Flickr/401kcalculator.org and Page Communications
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2 thoughts on “State Headliners: Labor Day electricity price spikes to $2,454 per megawatt hour

  1. Guy,
    1) “The wholesale cost of power hit almost $2,500/megawatt hour, almost 100 times the normal cost.”

    NORMAL COST DURING DAYTIME IS ABOUT 60 – 70 $/MWh, or 6 – 7 c/kWh.

    That is far from 100 times.

    2) “For example, our utilities pay Hydro-Quebec an estimated $50-70 per megawatt-hour for hydro power comprising about a quarter of Vermont’s demand.”

    GMP pays H-Q 5.549 c/kWh
    http://www.windtaskforce.org/profiles/blogs/green-mountain-power-cost-of-electricity-c-kwh

    3) Maybe you’ve noticed your utility enticing you to install a Tesla Powerwall battery in your basement? As battery prices decline, utilities are now looking less at solar and more at storage for peak shaving. Their idea: instead of filling Vermont’s scenic pastures with thousands of steel and glass solar panels that don’t work that well at 5-6 p.m., why not instead fill Vermont’s residential basements with batteries that do?

    I agree 100%. SHAVE THAT PEAK.

  2. Hey Guy Page. This is an opinion piece and a heavily biased one at that. Here’s an idea… provide some data/facts to support your wild hypothesis.

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