What's Happening To Wholesale Electricity Prices? (construction-physics.com)
- Reference: 0179372614
- News link: https://hardware.slashdot.org/story/25/09/19/165209/whats-happening-to-wholesale-electricity-prices
- Source link: https://www.construction-physics.com/p/whats-happening-to-wholesale-electricity
Transmission congestion spreads are widening in most Independent System Operators and Regional Transmission Organizations, particularly in PJM, SPP, and NYISO, where bottlenecks increasingly prevent access to cheaper generation. California's CAISO stands alone among major grid operators as wholesale prices remain flat or decline in 2025 despite natural gas volatility. The cheapest wholesale electricity continues to trade in SPP's Oklahoma-Kansas region at $16-17 per megawatt-hour.
[1] https://www.construction-physics.com/p/whats-happening-to-wholesale-electricity
Two letters: (Score:5, Insightful)
AI
Re:Two letters: (Score:4, Insightful)
Obvious post is obvious.
Re: (Score:2)
Obvious post was karma-whoring for a "Score:5, Insightful". Obviously!
Re: (Score:2)
When you see conservatives blaming renewables and the like for it the obvious needs to be pointed out.
Re: (Score:2)
When you see Georgia maga minions accusing a Hyundai battery plant of using up all the Georgia farmers' water, but welcoming data centers, you question if they are on the correct medications.
Re: Two letters: (Score:2)
Here in GA there is a proposed data center in the site of a logging operation and they have asked for a much power a the local utilities can provide. But I'm pretty sure charging my EV overnight at home once a week is the problem.
Re: (Score:2)
As middleroad also said, this is the answer to the rhetorical question. There is a new big dog at the bowl, and it is ravenous. And the owner is letting the big dog have all it wants.
Four more words (Score:2)
You are subsidizing billionaires.
Re: (Score:1)
The real question is, what can we do about these billionaires that are robbing us?
Half the country finds them entertaining and keeps voting for them, to get more entertainment.
Re: (Score:3)
The energy companies seem to be raking in the profits, such as Constellation, which is up by more than 300% since 2023, and over 750% in a 5-year time span (https://finance.yahoo.com/quote/CEG/). I don't know all what they do (energy generation and delivery are listed, but I suspect they do other things too, such as trade and speculate on energy like Enron did), but as an essential service that everyone needs it seems outrageous they are socking the public (particularly a public that doesn't get to choose w
Re: (Score:3)
For every complex problem there is an answer that is clear, simple, and wrong.
The problem is that distribution networks are highly regulated monopolies, many of them operating in the red because of fire-related lawsuits or government-mandated rate limits that don't respect the costs. They have no real incentive, and in some cases no funding, to expand to meet the ever-increasing demand.
There's a long backlog of electricity producers waiting to be connected to the distribution network, but that network is ex
Re: (Score:2)
Good point, but I don't think that's even hit its stride yet. We're talking about 2020-present, and it's not a hockey stick.
I suspect unintended consequences more than AI. That and regulatory capture of some kind. That's the usual suspects.
Re: (Score:2)
But also failure to deploy renewables faster enough. This week we have had two periods of free electricity due to the abundance of renewables. The things keeping retail prices high are mostly gas and a bit of nuclear. Our system works on the basis that everyone gets paid the price of the most expensive source, which is always gas or nuclear (we don't have any coal).
Another example of NIMBYism making things worse for everyone. Every objection to renewables is forcing prices to remain high.
Foreign investors (Score:4, Interesting)
My electric company is owned by a foreign consortium based in Vietnam and Australia. Maybe allowing that wasn’t such a hot idea for consumers.
Re: (Score:1)
What are you, a Communist?/s
Still subject to state regulation (Score:2)
The company may have foreign owners, but the company operating in your state is still under the jurisdiction of the state regulator.
If your state is "deregulated," then the power company provides transmission, but not generation, to its customers. In that case they bill you the supply cost based on what the market is offering.
If your state is not "deregulated," then the power company is providing both transmission and generation to its customers. In that case the state regulator will define the allowed mark
"Just buy bonds" (Score:1)
Who here thinks buying bonds is a better use of money than taking ownership of your own power generation by using solar+battery?
depends on your use case (Score:2)
Those bonds will help keep the air conditioning and refrigerator on when a hurricane wipes out electricity for weeks in half your state.
Substitute snowmageddon or heat dome as regionally appropriate.
Market forces (Score:5, Insightful)
And guess what's going to happen with the federal government not allowing any new solar or wind energy generation projects. It's going to take longer than a year for coal or gas plants to come online too so in the meantime just bend over and get ready.
Re: (Score:2)
Number go up!
Re: (Score:2)
You are half right, supply and demand are market forces.
Wrong Model (Score:5, Interesting)
The US electric grid is based on large generating plants connected by long distance transmission lines. This was the only feasible way to set up the grid when all you had were large generators.
However, with the rise of solar (home and commercial) and battery storage, it is possible to organize the grid as a network of small distributed generators. This reduces the need for long distance transmission and makes the grid more resilient since there are many more sources of energy and the failure of one is insignificant.
California is a good example where a network of home batteries has prevented four major outages this year and was called into use about 15 times to supplement large generators.
A problem is that power companies don't make profits from small scale generation and storage. It actually costs them. Power companies would rather invest in large generating plants and long distance transmission where they get a guaranteed return on investment and well as controlling the market so they can charge high prices.
Re: (Score:3)
If it's the same as here, then there is simply no market incentive for localized storage even though there is a massive need. For market to drive distributed storage, you need extremely local pricing.
Re: (Score:2)
PS. except for homeowners of course.
Re: (Score:2)
For "homeowners" substitute "property owners". Where I live, lots of commercial buildings have solar panels on their roofs or over their parking lots.
Re: (Score:2)
> If it's the same as here, then there is simply no market incentive for localized storage even though there is a massive need. For market to drive distributed storage, you need extremely local pricing.
In California, they have messed with the cost structure enough that solar without storage is usually not worth doing beyond your peak usage, because your excess power production won't net you nearly as much as you pay to buy that power back later in the afternoon.
Re: (Score:1)
It's not worth it even if you're on NEM 2.0. I get between 3-5 cents per kW that I send to the grid and pay about 39 cents per kW that I draw any other time. Thank goodness for my batteries...
Re: (Score:3)
That's why most solar installations in California now have batteries so they can store solar PV energy and avoid buying or selling from the grid.
Re: (Score:2)
> half the nation can't use home solar anyway
This is nonsense. Of course it can. You simply need to add more panels. Nobody wants to install used panels for money, because the way they profit is by marking up parts prices, and you get a bigger markup at the same percentage on a new panel. But there are absolute piles of used panels out there, I am actually seeing large numbers of them just given away, so this is absolutely a viable business. And that's never been more true than it is now with microinverters, because you can add panels in any numbers y
Re:What happened? Green mandates happened. (Score:5, Insightful)
Did you not notice the point that only in CA has the price actually remained stable lately? Maybe the green mandates to supplement the power DID help?
Re: (Score:2)
Plus my utility in CO just cut the price of their 100% renewable offset by about 60% (because they are transitioning to 100% carbon free power, and they need to offset less now) and so my rate is actually lower than it was 2 years ago.
Re: (Score:2)
That argument would carry more weight if you actually posted California's low, low electrical rates.
Re: (Score:2)
How would that change the fact that California's energy rates are not being effected by this current problem?
Re: (Score:2)
> How would that change the fact that California's energy rates are not being effected by this current problem?
Simple. California was an early adopter of these policies and already paying renewable premium.
Re: (Score:2)
Or maybe CA prices are stable because they were already sky-high.
The average cost per kWh in the US is 13.7 cents. In California, it's 26.0 cents.
[1]https://www.electricchoice.com... [electricchoice.com]
[1] https://www.electricchoice.com/electricity-prices-by-state/
Re: (Score:2)
Someone posted what they pay for electricity in California and what their buy back rate is and their rates are insane.
Re: (Score:2)
What mandate? There were tax breaks for renewables, not mandates.
what a coincidence! (Score:2)
huh... AI bulls*t becomes ubiquitous and electricity prices skyrocket. no correlation though, right? what a coinkydink.
Misleading headline (Score:1)
No, prices aren't rising. Owners are **choosing** to raise prices because they can.
If the gov't (yeah, i know) mandated a sliding cost scale, with highest prices for the biggest users, things would change rather quickly
Re: (Score:2)
> If the gov't (yeah, i know) mandated a sliding cost scale, with highest prices for the biggest users, things would change rather quickly
I've said this before. That won't work. Business, unlike homeowners, have the ability to create shell companies. The effort required to avoid rules like that is negligible for businesses. All that does is massively increase the billing hassle for the power companies.
Re: (Score:2)
I don't follow your reasoning at all. If a data center is using massive amounts of power why does it matter who owns it? Power companies just need to charge at the meter a scaling rate based on use. Some one has to pay that bill or the servers go off.
Re: (Score:2)
> I don't follow your reasoning at all. If a data center is using massive amounts of power why does it matter who owns it? Power companies just need to charge at the meter a scaling rate based on use. Some one has to pay that bill or the servers go off.
Ten tiny companies, ten meters.
Re: (Score:2)
> Ten tiny companies, ten meters.
So instead of paying higher prices for power they'll spend tons of money maintaining an incredibly inefficient system?
Re: (Score:2)
>> Ten tiny companies, ten meters.
> So instead of paying higher prices for power they'll spend tons of money maintaining an incredibly inefficient system?
Surprisingly little money. As soon as the extra cost exceeds the cost of hiring one person to maintain workarounds, it is cheaper to do the workarounds. Tricks like that might ostensibly work for individuals, but they fail badly every time when you're talking about big corporations.
Re: (Score:3)
> No, prices aren't rising. Owners are **choosing** to raise prices because they can.
> If the gov't (yeah, i know) mandated a sliding cost scale, with highest prices for the biggest users, things would change rather quickly
That's not how electricity prices work.
In non-wholesale market areas the cost of electricity is set by the government. The net return to the utility is fixed and pretty low, low to mid single digits percent. Monthly or yearly price variation in those regions are virtually always related to pass-through costs like fuel or storm damage which the utility "passes through" without markup to the customer. New large loads, like a datacenter, basically get explicitly approved by the state via regulatory mechanisms
Re: (Score:1)
> That's not how electricity prices work.
No, it is. Government just needs to tell power companies to charge on a sliding scale based on usage at the meter. It's incredibly simple.
You even say in your post that government sets the prices but somehow that cant be changed?
lets ask one of the culprits (Score:3)
Ai to answer that one
Re: (Score:2)
> It's a supply & demand issue
That's the only thing you got right.
AI is creating a massive surge in energy usage [1]https://www.goldmansachs.com/i... [goldmansachs.com] . THAT's what's causing these higher prices, rapidly increasing demand [2]https://www.pbs.org/newshour/s... [pbs.org]. [3]https://www.cbsnews.com/news/a... [cbsnews.com]
We know green energy works and we know the "baseload problem" is a conservative myth [4]https://www.nrdc.org/bio/kevin... [nrdc.org] .
[1] https://www.goldmansachs.com/insights/articles/AI-poised-to-drive-160-increase-in-power-demand
[2] https://www.pbs.org/newshour/show/how-ai-infrastructure-is-driving-a-sharp-rise-in-electricity-bills#:~:text=And%20there's%20a%20couple%20of,lines%20and%20other%20related%20assets
[3] https://www.cbsnews.com/news/artificial-intelligene-ai-data-centers-electricity-bill-energy-costs/#:~:text=Mary%20Cunningham%20is%20a%20reporter,the%20CBS%20News%20Associate%20Program.&text=Alain%20Sherter%20is%20a%20senior,workplace%20issues%20for%20CBS%20MoneyWatch.&text=New%20Jersey%20residents%20got%20some,coming%20years%2C%20according%20to%20experts.&text=National%20Energy%20Assistance%20Directors%20Association,sweetheart%20deals%20behind%20closed%20doors.%22
[4] https://www.nrdc.org/bio/kevin-steinberger/debunking-three-myths-about-baseload
Re: (Score:2)
Okay, I work in the industry.. If solar and windmills worked, we would be putting them up everywhere. They don't work.
Worse coming... (Score:2)
......with the Big Bad Bill allowing natural gas to be exported overseas, the largest portion of electricity energy supply will rise with greater demand.
I'd plan on electricity being significantly more expensive upcoming.
Re: (Score:2)
I wonder how much of a thing this will be though. While we do currently move some natural gas around by boat in liquefied form it's incredibly expensive relative to piped sources [1]https://energynewsbeat.co/how-... [energynewsbeat.co]. .
[1] https://energynewsbeat.co/how-cheap-is-russian-natural-gas-via-pipeline-compared-to-lng-imports/#:~:text=Russian%20Pipeline%20Gas%20(2025%20estimate,price%20difference%20shrinks%20even%20more
Our state gov did it (Score:2)
Our state government pressured our utility (who mostly uses hydro and some NG) to dump their one small coal plant. Since then, they are paying spot prices far more often. Since they can't raise consumer rates much, they are laying folks off like crazy internally to try to stay afloat, so it takes forever to get work done.
Thank you WA state!
Regionally Specific (Score:2)
What happens to residential electricity pricing is very specific to region. In California, the cost of PG&E's electricity has skyrocketed due to wildfires. You just need to spark a couple wildfires during a mega-drought and high winds then suddenly WHAMO! -- $30 billion dollar settlement, bankruptcy proceedings, (https://en.wikipedia.org/wiki/Pacific_Gas_and_Electric_Company#Wildfires), and a mandate to put 10,000 miles of above-ground power lines underground.
All of that is extremely expensive. They nee
Came for the ignorance (Score:2)
And wasn't surprised in the least. I've worked with electric utilities all over the English speaking world and the ignorance is universal. Here the communist John Oliver does an amazing job clearly explaining how electric utilities work. [1]https://www.youtube.com/watch?... [youtube.com]
Just ignore his batshit crazy solution at the end. It's almost as if he had someone incredibly intelligent write the first 20 minutes and then someone else who never watched it do the last part.
[1] https://www.youtube.com/watch?v=C-YRSqaPtMg
Greed combined with bad laws (Score:1)
Utility company gets X% of the money charged to share holders.
Rates can go up to cover the cost of building new generation plants.
So - build the most expensive generation plant you can get away with.
Rates get moved up.
Utility company gets same X% just of a bigger pie.
Profit!
Re: (Score:3, Interesting)
It's not the fault of EVs but the fault of Regulators giving electricity generating and transmission companies what they want. In California (the canary in the proverbial coal mine for the rest of the country, just you wait), the CPUC (California Public Utilities Commission) hamstrung solar, by getting rid of net energy metering (NEM 2.0 here), and ushering in "net energy metering", (Nem 3.0) which makes solar name almost no sense, unless you can perfectly predict your usage and can spend a fortune in batte
Re: (Score:2)
I don't see this as a troll but an honest opinion. Why is this being downmodded as troll? Do you suspect it was posted by Jimmy Kimmel?
Mod abuse right here. Mod parent up to 2 at least.
Re: (Score:2)
Because it is just factually wrong and Slashdot doesn't have a "wrong" or "incorrect" mod option.
NEM was modified to drive investment and demand in battery energy storage. CA massively over produces solar energy. So much so that utilities are forced to PAY out of state utilities to take our excess production. The solution is more storage, not more generating capacity.
The market was not driving investment in batteries and demand is too low to drive economies of scale and reduce cost. The State decided to cha
Re:Too many EVs (Score:5, Insightful)
Really? you think its the 1 out of 20 cars that's causing the grid to buckle?
It's clearly because we changed the law to sell our natural gas to other countries at the same time as an explosion in electrical computing needs (mostly caused by AI Junk)
but keep pushing those ridiculous talking points
Re: (Score:2)
+1, insightful
Re: Too many EVs (Score:2)
Europe not buying LNG from Russia distorts the market. US producers can get a better price selling to Europe, so prices go up in the US too. If you donâ(TM)t like this, youâ(TM)re better off crushing Putin so Europe starts buying Russian LNG again. You canâ(TM)t just sit back and ignore it if you donâ(TM)t like it.
AI training based on availability of the sunlight? (Score:2)
If you have to feed the troll, can't you at least think of a substantive Subject?
But is there any Funny in the discussion of the story?
Re: (Score:2, Insightful)
EVs would be residential, not wholesale, pricing.
Big AI Data Centers would be wholesale pricing.