Electric ratepayers in the Boston and New York City markets are paying more for electricity due to increasing natural gas prices, and some power generators are switching from natural gas to oil, because oil costs less, according to a recent report by Bloomberg News.
Natural gas spiked recently to its highest levels in 11 months, according to Bloomberg. Power generators that use natural gas either raised their prices or switched to oil, which was less expensive, as it has been often in the past. Bloomberg reports that the price of oil was lower than the price of natural gas by $9.88 per million BTU.
With many power plants switching from natural gas to oil to capture the price advantage, New England was recently seeing as much as 13 percent of its electricity generated with oil, up from the 2014 average of 5.2 percent.
The natural gas price increases caused electric prices to rise by 35 percent in Boston and 38 percent in New York City, according to the Bloomberg report.
"Oil was priced at a discount to natural gas in New York," the article stated.
To read the Bloomberg News article, click here.