Wholesale Electricity Price
The price at which generators sell electricity to utilities and retailers in regional markets (PJM, ERCOT, CAISO, etc.), typically $20-80/MWh. Not directly paid by residential customers.
Why It Matters
Wholesale prices drive retail rate changes with a lag. Spikes in wholesale markets (like the 2021 Texas crisis) eventually show up in your utility bills.
Related Terms
ERCOT
The Electric Reliability Council of Texas — the independent system operator that manages the Texas electric grid, which covers ~90% of the state and is largely isolated from other U.S. grids.
PJM Interconnection
A regional transmission organization (RTO) coordinating the movement of wholesale electricity in 13 states and D.C., from Illinois to the mid-Atlantic coast. The largest power market in North America.
Merit Order
The sequence in which power plants are dispatched to meet electricity demand, ranked from cheapest to most expensive operating cost. Renewables and nuclear (near-zero fuel cost) dispatch first; expensive peaker plants dispatch last.