As discussed previously here and here - despite numerous factors that don't make it a direct corollary lower gas prices generally have led to lower power prices in the U.S. and higher gas prices have led to higher power prices
Higher power prices in more natural gas levered U.S. states continues to play out across power markets
We look at the most recent EIA industrial power price data for indications of the magnitude of fuel price changes on power prices
Gas Ripping, Power Prices Catching Up
The data is quite clear by now, states with a higher percentage of natural gas generation are seeing power bills rise faster than those with more renewable leverage.
Capital costs are surely going up for any power project but fuel costs often hit power bills nearly immediately whereas capital cost impacts will be felt over time.
If we just look at lower-48 states, the top-10 states with the most natural gas generation have industrial power prices 21% higher than the lowest ten states.
Recall that we've shown this chart previously. The interpolation has flipped compared to the 2018 to 2020 timeframe when natural gas prices dropped. The correlation to natural gas continues to get tighter.
Since April 2020 when natural gas roughly bottomed, four states have seen industrial power prices drop compared to the U.S. average of +15%.
Those four states (WY, IA, ND, NE) rank #46, 40, 47 and 45 for amount of natural gas generation and are some of the highest producing wind generation states. Surely that is no coincidence.
Looking at the states with the ten lowest power price changes, 9 out of 10 are the U.S. states with the lowest percentage of natural gas generation.
The data largely speaks for itself.