The Generation Mix & Its Influence

The Generation Mix & Its Influence

The rising cost of electricity has been felt in the budgets of households and businesses nationwide. Numerous factors contribute to the increase of the total price but to strip away utility delivery charges, regional taxes, and ancillary fees will leave us with the raw cost of the underlying electricity. The types of electric generation plants available within a region hold significant influence over the final price and, with an ever-growing push toward renewables and the closure of aging plants, the country has seen a rise in reliance on one fuel: natural gas.

A Closer Look at New York

New York is a prime example of this trend. Indian Point Energy Center was a nuclear generation facility just south of Peekskill, NY. It generated 2,000MW of power across two reactors and covered 25% of New York City’s electricity consumption. The continued growth of the state’s demand for energy necessitated that Indian Point’s lost generation be replaced. This came in the form of three natural gas fired plants, 1,800MW in total, that increased New York’s reliance on one fuel source to greater than 50% of its generating capacity throughout much of the year.

Why It Matters

It is due to this that natural gas exhibits unparalleled influence on the cost of electricity. Winter pricing is particularly susceptible as New York residents rely on natural gas to both heat their homes and power their lights. Seasonal price spikes have become increasingly volatile as the demand for electricity and natural gas continues to grow. 

Taking a Proactive Approach

With energy costs more unpredictable than ever, it’s essential to take a proactive approach to energy management. At Power Management, we help businesses and organizations understand the evolving energy market, manage risk, and develop strategies tailored to their energy needs. Contact us today to learn how our energy experts can help!