Why are electricity prices so volatile?
Prices for electricity supply can change dramatically because they are closely tied to the price of natural gas. As well, in Massachusetts, supplies are obtained from only two purchases and no more than a year in advance so there is little blending of prices obtained at many different times. Massachusetts law and DPU instructions establish the timing and amounts of power that WMECO (and all other public utilities) can obtain at any time, and WMECO establishes the best terms and conditions possible to obtain the lowest prices from suppliers.
