Reliability of the bulk power system should be adequate this summer but wholesale prices likely will be considerably higher than a year ago as market forces drive up natural gas prices and the amount of gas-fired generation continues to grow, FERC staff said Thursday.rnForward power prices from the IntercontinentalExchange are 50% to 90% higher than last summer in areas operated by regional transmission organizations and non-RTO areas, the Office of Electric Reliability's Dave Andrejcak said in a summer assessment presented at FERC's open meeting.rnThe degree of wholesale price increases will depend on how often gas is the marginal fuel being burned for generation, and not on whether a region is part of an RTO, explained Charles Whitmore of FERC's Office of Enforcement. Thus, the largest increases (89%) appear in the Northeast, where gas is "almost always on the margin," and the lowest (49%) appear in the Midwest, where coal is more often on the margin.rnSeveral factors are driving up gas prices, including reduced imports from Canada, reduced liquefied natural gas imports and lower storage levels than last year heading into summer, said Whitmore. Some forecasters predict a more active hurricane season than normal, and one of the forces keeping gas prices elevated could be the fear of hurricanes, he suggested.
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