Dive Brief:
- U.S. wholesale electricity prices will average $45/MWh this summer, a $4/MWh decline relative to last year, the U.S. Energy Information Administration said Thursday in its monthly Short-Term Energy Outlook. The composite price is a load-weighted average of prices at several hubs, as power prices vary widely across the country.
- The roughly 8% decline in wholesale power prices largely reflects lower costs of natural gas delivered to power plants, particularly in the western part of the country, EIA said.
- But it is unlikely that consumers will see much relief, experts caution. Household electric bills are expected to jump 10.5% this summer over last, and cooling costs could hit record highs, according to a report last month from the National Energy Assistance Directors Association and the Center for Energy Poverty and Climate.
Dive Insight:
“Heatwaves during the summer could still cause price spikes,” EIA cautioned in its short-term outlook.
The U.S. is just a week past its first major heatwave of the summer, when scorching July temperatures sent prices higher in several markets. PJM Interconnection, the largest electricity market, leaned on demand response to avoid a new load record and saw spot electricity prices jump to $600/MWh in Virginia. New England wholesale spot prices leapt 243% and New York City prices doubled, according to reports.
“I am not expecting consumers to get much of a price savings this summer,” NEADA Executive Director Mark Wolfe said in an email.
The federal government’s energy data arm is “showing no change to their estimates for retail electric prices this summer,” Wolfe noted. And he added that based on EIA and other data “I am continuing to estimate that this will be a record hot summer and require families to use more electricity to stay cool.”
NEADA’s June report forecast average summer residential electricity expenditures to reach $792 this year, up from $717 in 2025. The findings concluded summer cooling costs have increased nearly 40% since 2020, driven by higher electricity prices and more extreme weather.
The lower power prices EIA is forecasting vary widely across the country, and are higher in some regions. The composite decline is led by changes in three western regions and the Midcontinent Independent System Operator region.
EIA sees prices dropping 46% at the Northwest Mid-Columbia hub, from $50/MWh in summer 2025 to $27/MWh this summer, “amid a substantial increase in hydropower.”
The report forecasts wholesale power prices in California to fall by 30% and average $23/MWh this summer, and Southwest wholesale power prices to fall by 27% and average $28/MWh. “Natural gas prices in both of these regions are also relatively low,” EIA said.
Prices in MISO are 18% lower in EIA’s forecast, declining from an average of $56/MWh last summer to $46/MWh. “In MISO, we expect large increases in solar generation, in particular, alongside increases from natural gas, wind, solar, and nuclear,” the report said.
Prices in PJM and ISO New England are forecast to average $69/MWh and $64/MWh, respectively, slightly higher than last summer, EIA said.
