The first six months of 2012 ushered in lower wholesale electricity prices for both on-peak and off-peak power, according to the U.S. Energy Information Administration.
The warmest winter on record and a 10-year low for natural gas prices led to the significant drop over the same period in 2011. On-peak prices, for example, fell between 24-39% in major wholesale price hubs.
Prices for off-peak electricity (used on nights and weekends) also dropped in the same time period for most of the studied cities, though the decline was smaller than that of on-peak power. However, the CAISO NP15 hub in northern California increased 10%, due mainly to nuclear outages this spring and record-breaking hydroelectric output in spring 2011.
According to the Energy Information Administration, off-peak prices reflect the cost of maintaining output from baseload generators. On-peak prices, on the other hand, reflect the price of generating from intermediate and peak generators throughout the day, a more expensive proposition.
Natural gas fell about 40-50% compared to last year, which led to increased use of natural gas to generate electricity, which then enabled the decline in wholesale electricity prices.