PJM to the Top

July 10, 2023

The holiday-shortened week saw ERCOT re-take the lead with the highest interest in market-based risk and index or flex products. Texas has been in focus lately as record heat has produced record-breaking demand days. However, natural gas prices have remained flat, and the spark spread is nearly 50% lower than one year ago. Spark spreads are a calculation involving current prices of energy and natural gas, and a measure of generating efficiency (heat rate). The higher the spread, the greater the financial incentive for natural gas generators to buy natural gas and produce electricity, versus buying power on the grid.

At the other end of the spectrum last week was NYISO, whose market participants continue to prefer fixed-price pricing requests that avoid market-based risk.

Risk Appetite Report 7/3/23 – 7/7/23

The risk appetite gauges above reflect the mix of fixed, flex, and index volume priced on behalf of customer requests in the period. The total annual MWh priced represents 77,621,206 for customers with peak demand above 750 KW.