The Widowmaker
We take another look at power and natural gas prices
Home heating and power bills tied to natural gas will surely create a web of financial strains on many U.S. consumers over the next several months
EIA monthly electricity prices for May 2022 were released recently
We compare recent changes in industrial power prices (the closest available retail price to wholesale) by U.S. state and natural gas generation exposure
Natural Gas Prices Remain Robust
Summer heat in the U.S. and conflict in Europe continue to support natural gas prices, with recent prices in the $8-9/MMBtu range.
The correlation is fairly tight between 2-year percentage change in industrial power prices and the amount of power stack fueled by natural gas generation
Few states have been safe from rising industrial power prices
Impact on Power Prices
The top-10, lower-48 U.S. states with the most natural gas generation have seen industrial power prices rise 29% over the last 24-months, 3.8x the change in the lowest-10 states.
Industrial power prices are 33% higher in the states with the highest natural gas exposure compared to those with the least generation from that fuel source.
Over the last 2-years, four states have seen their industrial power prices rise over 50%.
It can seen visually that blue states - those perceived to be embracing renewables more - generally have higher power prices than red ones
But it is also visible that red states - those perceived to be supportive of fossil fuels - have generally seen power prices rising faster in recent months
The summer isn't over, things could get even hotter for U.S. power consumers 🔥
