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Summer price forecast shows electric supply costs staying near historically low levels

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Fri, May 18th 2018 09:10 pm
As a result of REV, summer peak energy demand continues to fall
The New York State Public Service Commission announced the cost for electricity is expected to remain near historically low levels this summer. In addition, peak power demand forecasts continue to fall thanks in large part to Gov. Andrew M. Cuomo's Reforming the Energy Vision (REV) strategy. The decline in the amount of electricity consumed during the year helps lower costs for consumers and helps save the environment by reducing air pollution from power plants.
"The summer outlook in terms of adequate supply and lower electricity prices is very good news for residential and business customers," commission Chairman John B. Rhodes said. "Gov. Cuomo's REV initiative to create a cleaner, more resilient and affordable energy system continues to yield dividends including lower consumer costs."
There are many factors that are helping to keep prices down, including commission-ordered programs to lower demand, requiring utilities to use policies to mitigate volatility in prices, all of which are helping to ensure price stability for consumers.
This summer's energy prices are expected to be between 9 and 12 percent lower than the five-year average. Additionally, this year's price forecasts are down from last year's between 5 percent and14 percent across the state, which means that consumers could potentially see lower bills this summer compared to last summer if the weather is comparable.
The energy price forecasts are based on current projections from the New York Mercantile Exchange, although actual prices can vary from these forecasts due to a number of unpredictable factors, such as weather and overall demand for electricity. Financial hedging by the state's regulated utilities will also reduce any price increases this summer and this sound financial planning will also protect against unforeseen and unexpected spikes in supply costs.
There are sufficient generating capacity resources to supply expected customer demands and all of the state's electric utilities are prepared to serve those expected customer demands. Typically, the forecast for this demand (known as the peak load) has been in the range of 33,300 megawatts (MW), compared to the winter peak of about 25,000 MW. Peak load this summer is expected to be 32,904 MW - down slightly from last year. Peak load continues to fall due to the energy reforms under REV.
In the summer of 2013, New York set an actual record peak load of 33,955 MW. Thanks to REV and other improvements, NYISO's current forecast for 2025 is about 3,000 MW less than its 2015 forecast. A 3,000 MW decrease in peak demand is the equivalent of the electricity generated by several large power plants or enough to supply approximately 2.5 million average size homes.
Reforming the Energy Vision is Gov. Andrew M. Cuomo's strategy to lead on climate change and grow New York's economy. To learn more about REV, visit rev.ny.gov.

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