« Beating the heat: how ISO-NE prepares for the dog days of summer | Main | 2018 forecast of capacity, energy, loads, and transmission is published by ISO-NE »

Monthly wholesale electricity prices and demand in New England, April 2018

Demand was low, particularly on April 21; natural gas and wholesale power prices rose in April

April 2018 stood out for near-record-low demand for power and a first-ever instance of lower daytime demand than nighttime demand in New England. Despite the low demand, higher prices for natural gas drove up the price of wholesale electricity for the month.

The average monthly price for natural gas rose nearly 60% during April compared to the prices recorded during April 2017. The average wholesale power price for the month of April 2018 also rose in both the day-ahead and real-time energy markets when compared to the previous year. The day-ahead energy price was up 53.9% to $45.00 per megawatt-hour (MWh)* and the real-time energy price rose 37.7% to $43.38/MWh.

Total energy consumption in April 2018 was the second-lowest of any month since 2000, at 8,964 gigawatt-hours (GWh). The lowest energy consumption of any month since January 2000, when ISO demand records begin, occurred just a year ago, in April 2017, at 8,856 GWh. Energy consumption is typically low during mild weather in the spring and fall. Increasing installation of energy-efficiency measures and significant growth in behind-the-meter photovoltaic (PV) arrays are also having a significant effect on consumer demand for power from the regional power grid on sunny days.

The combination of low springtime demand for power, low weekend demand, and high output from the more than 130,000 behind-the-meter installations in New England resulted in lower system demand at 2 in the afternoon than at 2 in the morning on Saturday, April 21, a first for the region. System operators expect this may happen more frequently as PV grows on the system.

Drivers of wholesale electricity prices

In general, the two main drivers of wholesale electricity prices in New England are the cost of fuel used to produce electricity and consumer demand.

Power plant fuel: Fuel  is typically one of the major input costs in producing electricity. Natural gas is the predominant fuel in New England, used to generate 48% of the power produced in 2017 by New England’s power plants, and natural gas-fired power plants usually set the price of wholesale electricity in the region. As a result, average wholesale electricity prices are closely linked to natural gas prices.

The average natural gas price during April was $4.99 per million British thermal units (MMBtu)**, up 57.4% from the April 2017 average Massachusetts natural gas index price of $3.17/MMBtu. The Mass. index price is a volume-weighted average of trades at four natural gas delivery points in Massachusetts, including two Algonquin points, the Tennessee Gas Pipeline, and the Dracut Interconnect. The April average natural gas price recorded a 25.2% increase from the March 2018 price of $3.98/MMBtu.

Electricity demand: Demand is driven primarily by weather as well as economic factors. Energy usage during April 2018 rose slightly, by 1.2% to 8,964 GWh from the 8,856 GWh used in April 2017. Energy usage during April 2017 was the lowest of any month since January 2000, while usage during April 2018 was the second-lowest. The average temperature during April was 43˚ Fahrenheit (F) in New England, compared to 51˚ recorded as the average during the previous April. The average dewpoint, a measure of humidity, was 30˚F, compared to 38˚F in April 2017. The number of heating degree days (HDD)*** came in at 651 in April, compared to 430 HDD in April 2017. The normal April level is 515 HDD in New England. There were no cooling degree days in April.

Peak demand for the month was recorded at 15,740 MW on April 3 during the hour from 7 to 8 p.m., when the temperature in New England was 37°F and the dewpoint was 36°. The April 2018 peak was 0.7% lower than the April 2017 peak of 15,843 MW, set during the hour from 5 to 6 p.m. on April 6, when the temperature was 40°F and the dewpoint was 39°.

Peak demand is driven by weather, which drives the use of heating and air conditioning equipment. The all-time high winter peak was 22,818 MW, recorded during a cold snap in January 2004 when the temperature was -1°F and the dewpoint was -20°. The all-time peak demand in New England was 28,130 MW, recorded during an August 2006 heat wave, when the temperature was 94°F and the dewpoint was 74°. Air conditioning use is far more widespread than electric heating in New England, so weather tends to have a relatively greater impact on the summer peak than the winter peak.

Fuel mix: The mix of resources used in any given time period depends on price and availability, as well as supplemental resource commitments needed to ensure system stability. Natural gas-fired and nuclear generation produced 74% of the 7,639 gigawatt-hours (GWh) of electric energy generated within New England during April, at about 41% and 33%, respectively. Renewable resources generated about 11% of the energy produced within New England, including 6% from wood, refuse, and landfill gas; 3.5% from wind; and 1.4% from solar resources. Coal units generated 2%, and oil-fired resources produced 0.3% of the energy generated within New England. Hydroelectric resources in New England generated 13%. The region also received net imports of about 1,455 GWh of electricity from neighboring regions.

April 2018 and Percent Change from April 2017 and March 2018
April 2018
Change from April 2017
Change from March 2018
Average Real-Time 
Electricity Price 
$43.48 +37.7% +32.0%
Average Natural Gas Price 
$4.99 +57.4% +25.2%
Peak Demand
15,740 MW -0.7% -6.6%
Total Electricity Use
8,964 GWh +1.2% -9.7%
Weather-Normalized Use****
8,915 GWh +1.2% -10.3%
*One megawatt (MW) of electricity can serve about 750 to 1,000 average homes in New England. A megawatt-hour (MWh) of electricity can serve about 750 to 1,000 homes for one hour. One gigawatt-hour (GWh) can serve about 750,000 to 1 million homes for one hour. **A British thermal unit (Btu) is used to describe the heat value of fuels, providing a uniform standard for comparing different fuels. One million British thermal units are shown as MMBtu. ***A degree day is a measure of heating or cooling. A zero degree day occurs when no heating or cooling is required; as temperatures drop, more heating days are recorded; when temperatures rise, more cooling days are recorded. The base point for measuring degree days is 65 degrees. Each degree of a day’s mean temperature that is above 65 degrees is counted as one cooling degree day, while each degree of a day's mean temperature that is below 65 degrees is counted as one heating degree day. A day’s mean temperature of 90 degrees equals 25 cooling degree days, while a day's mean temperature of 45 degrees equals 20 heating degree days. ****Weather-normalized demand indicates how much electricity would have been consumed if the weather had been the same as the average weather over the last 20 years.