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2009 State of the Market Report

Market Performance

Figure 15: Day-Ahead Hub Prices and Load 2009: Peak Hours

$75

$/MWh

$60

$45

$30

Cinergy Hub Minnesota Hub WUMS Area Michigan Hub

$15

$0

100,000

80,000

60,000

MW

40,000

20,000

0

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Day-ahead prices were stable throughout the year with the highest pricing occurring during the highest load periods, as expected. Due to mild weather and relatively poor economic conditions, load was not as high or as variable as one would normally expect, particularly during the summer. As a result, price volatility declined in 2009. The introduction of ASM led to significant improvements in generating unit flexibility, which also contributed to the reduction in price volatility.

The load-weighted average day-ahead energy price in all peak hours in 2009 was $35.85 per MWh, a 48 percent decrease from 2008. This decrease was due to very low fuel prices and mild peak load conditions. Fuel costs were highest at the beginning and end of the year, leading to higher day-ahead energy prices in these periods.

Persistent west-to-east congestion across the Midwest ISO caused the lowest average prices in Minnesota ($33 per MWh) and the highest prices in Michigan ($38.40). Transmission outages and high load in late June contributed to substantial congestion out of the West and the highest day-ahead prices of the year in eastern areas. Traditionally congested regions in the Midwest

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