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2009 State of the Market Report

Market Performance

ISO, notably WUMS, were less congested in 2009 as a result of continued transmission investments. Figure 16 shows the same results for off-peak hours.

Figure 16: Day-Ahead Hub Prices and Load 2009: Off-Peak Hours

$75

$/MWh

$60

$45

Cinergy Hub Minnesota Hub WUMS Area Michigan Hub

$30

$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

Off-peak prices were 38 percent lower on average in 2009 than in 2008. Congestion between eastern and western hubs and volatility were more prominent in the off-peak hours, and were higher on a percentage basis than in prior years. For example, prices in WUMS and at the Minnesota Hub averaged $21 and $19 per MWh, respectively. Prices at the Cinergy Hub and Michigan Hub averaged close to $25 per MWh.

Day-ahead, off-peak prices were highest from January through March due to winter load patterns and higher fuel prices. Prices at the Cinergy and Michigan Hubs were only marginally higher than prices at the Minnesota Hub and WUMS during these months. The high loads in the winter- peaking western areas resulted in less congestion out of and more congestion into the West. The decline in prices was driven partly by the decrease in coal prices since coal-fired generation was almost always the marginal fuel in off-peak hours. Lastly, transmission outages were not as

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