Oct. 26 (Bloomberg) -- Wholesale electricity prices fell for most of the U.S. as cheaper natural gas reduced fuel costs for some generators and mild weather trimmed demand.

Electricity traded today for delivery tomorrow, when heating needs in the U.S. will be 9 percent below normal for late October, compared with demand today that’s about average, according to forecaster Weather Derivatives of Belton, Missouri.

“Not only will October finish off ‘not cold’ but will actually be quite mild for most of the furnaces around the country,” David Salmon at Weather Derivatives said in a note to clients.

Electricity in the New England Power Pool fell $4.39, or 8.4 percent, to $48.11 a megawatt-hour on the Atlanta-based Intercontinental Exchange.

The milder weather comes as natural gas, a power-plant and heating fuel that’s used to generate a fifth of U.S. electricity, fell in cash market trading.

Gas for delivery to Boston on the Algonquin pipeline sank 29 cents, or 5.5 percent, to a one-week low of $4.94 per million British thermal units in cash market trading today.

Within the PJM Interconnection, a benchmark for the grid that stretches from Washington to Chicago, power fell $2.37, or 5 percent, to $45.13 a megawatt-hour.

Power in the North region of the Electric Reliability Council of Texas, an area that includes Dallas, decreased $3.70, or 9.1 percent, to $36.80 a megawatt-hour.

Gas for delivery tomorrow to Katy, Texas, dropped 50 cents, or 10 percent, to $4.49 per million British thermal units.

Power also rose in California, where demand was forecast to peak at 29,615 megawatts tomorrow, down from a forecast high of 31,143 today, according to the state’s grid operator.

Electricity in Northern California fell for a fourth day, declining $5.12, or 8.5 percent, to $54.88 a megawatt-hour. In Southern California, the price slipped $6.02, or 10 percent, to $53.98 a megawatt-hour.

To contact the reporters on this story: Christopher Martin in New York at cmartin11@bloomberg.net;

Last Updated: October 26, 2009 15:45 EDT