Electricity Cost Outlook for 2019 and Beyond
The United States' growing economy, coupled with continued exports of natural gas, will be among the significant, but not the only macroeconomic factors influencing electricity costs for New York-based nursing and elder care facilities going into 2019.
In addition to these trends, New York state energy consumers must remain mindful of local factors that may drive energy markets upward in the next year or two.
The most significant of these local factors is the impending closure of the Indian Point nuclear plant in Buchanan near Peekskill, Westchester County. The plant, at more than 2,000 megawatts, provides a major amount of electricity and generating capacity to the Consolidated Edison service area. Its closure will create a need for replacement electricity and capacity. If the replacements come short of what is lost, energy prices are likely to rise significantly in the NY Metro region, and have a noticeable ripple effect coming north and west through upstate New York.
Forward energy curves in 2021 and 2022 are already showing the effect of this uncertainty. We have seen forward dated contracts for that period at 15% to 20% above prices for 2018 and 2019. Clearly, buyers seeking price stability out three or four years from now will pay a premium above today's low market prices. Buyers choosing to 'wait and see' will be betting that the eventual market increase is no worse than what futures traders are guessing about today.
EnergyNext, Inc., consultants to LeadingAge Services of New York, is prepared to review any member's pricing and usage with a view to better managing their overall cost of energy, both electricity and natural gas. The firm's expertise has supported LeadingAge members for more than 20 years. Please contact Joanne Foresta, firstname.lastname@example.org to find out how the LeadingAge Services energy program can help your facility.