Marc Spitzer

During last week’s regular open meeting, staff with the Federal Energy Regulatory Commission presented their 2009 State of the Markets Report, and the outcome for energy consumers was profound.  Prices for natural gas were down by 50 percent across the country, and as a result electricity rates declined proportionately in the organized competitive markets, where gas is a key generation fuel. Costs for both natural gas and electricity were at the lowest levels seen since at least 2002 – even earlier in some regions, FERC staff reported.

The benefits of competition were a key topic at a recent Federal Energy Regulatory Commission (FERC) oversight hearing by the House Energy and Commerce Committee’s Energy and Environment Subcommittee.

“Organized wholesale electric markets create opportunities and encourage innovations that benefit consumers,” FERC Chairman Jon Wellinghoff said.

Wellinghoff noted that one of the largest benefits of these markets is the ability to level the playing field between traditional generation resources and a wide range of resources including renewable energy, demand response, energy efficiency and distributed generation. “Removing barriers that keep renewable energy resources from competing in wholesale markets must be part of our strategy to move toward energy independence.”

Last week’s regular meeting of the Federal Energy Regulatory Commission featured a staff assessment of the outlook for energy markets this winter, including the “exciting” development that natural gas and electricity prices have fallen to their lowest levels since 2001. Forward prices for natural gas this winter are significantly lower than at this time last year, and gas was placed into storage earlier this year for consumption during peak demand winter months at an average price of $3.45, nearly a third of the $9.40 average cost last year, FERC staff reported.