New England’s power grid operator says wholesale electricity prices dropped by nearly 23 percent regionally last year thanks to falling natural gas prices and decreased demand.
ISO New England said Wednesday that electricity prices are now at their lowest levels since 2003.
The lower wholesale prices don’t necessarily mean quick drops in monthly power bills. Utility regulators set retail rates in advance, and because the rates are in place for intervals of months or years, the lags between drops in wholesale and retail prices can vary.
But since ISO expects the trend of low natural gas prices to continue, the savings should be coming.
ISO says wholesale power prices dropped from $46.23 per megawatt hour in 2011 to $36.09 last year. That means buyers paid $1.5 billion less for electricity in 2012 than in 2011.
The driver in the falling wholesale rates is a 20 percent decrease in the price of natural gas.