MISO generators favored gas in February

OREANDA-NEWS. April 14, 2016. Power generators on the Midcontinent Independent System Operator (MISO) grid used a higher percentage of natural gas in February amid lower prices even as mild weather curbed overall electricity demand.

Natural gas accounted for 23.3pc of the MISO fuel mix in February, up from 21.5pc a year earlier. Dispatched power fell by 8pc year-over-year to 49.6 TWH. Coal historically has been the key source fuel for power generation in that region. It represented 46.5pc of the fuel mix, down from 54.2pc the year earlier.

MISO, the second-largest US power market behind PJM, breaks fuel-source information for its 15-state region into three distinct zones.

MISO's north zone includes Iowa, western Minnesota, Wisconsin, North and South Dakota and eastern Montana. MISO's central zone covers Michigan, eastern Wisconsin, and parts of Illinois, Indiana, Kentucky and Missouri. MISO's southern zone covers parts of Arkansas, Louisiana, Mississippi and southeast Texas.

In MISO's coal-dominated central region, gas-fired generation in February represented 18pc of the fuel mix, up from 14pc a year earlier. Coal was used to generate 62pc of the central zone's power in February, down from 70pc a year earlier. Both wind and nuclear generation also increased year over year.

In the gas-dominated south region, gas accounted for 58pc of February's electric output, marginally higher than the ratio in February 2015. Meanwhile, coal fell more than 3 percentage points to 15pc, primarily offset by higher nuclear generation.

The northern region, another coal-dominated zone, burned gas for 8.4pc of the electric supply in February, up from 5.7pc the year earlier.

Wind is becoming a major source for the north region's power generation, which met 31pc of February electric demand, up from 24pc the year earlier.

In addition, wind generation in MISO saw an all-time peak output of 13.1 GW on 19 February and total February wind generation across MISO footprint was at 4.1 TWH, 13.3pc higher than the year before.

Natural gas was "at the margin" or set the whole sale prices for electricity at a much higher rate during both peak and off-peak hours in February than a year earlier as gas prices remained low this winter.

The average spot gas price at the Chicago Citygates in February was \\$1.99/mmBtu, about half the price in February last year. The average coal price from the Illinois basin declined 24pc during that same period, according to MISO.

Chicago gas prices dropped further in March amid record-high stockpiles and sluggish heating demand. US inventories in the week ended 1 April rose to 2.48 Tcf (70bn m?), setting a new end-of-winter record, according to the US Energy Information Administration.

Chicago Citygates prices averaged at \\$1.79/mmBtu in March, down another 10pc from February.