Winter 2018/2019 recap: What a difference a year makes

A year ago, Winter 2017/2018 included two weeks of bitter cold that challenged power system operations, but this past winter was marked by more moderate temperatures, leading to lower wholesale electricity prices and less stressful system conditions.

Temperatures during the 2018/2019 winter months – December, January, and February – averaged 30°F, less than a degree higher than the previous winter’s average temperature. But the difference was the region was not hit by any prolonged periods of extreme cold. With no extreme temperatures lasting for days, the region avoided the price spikes that drove up average wholesale power prices last year.

Energy market prices averaged $43.65 per megawatt-hour (MWh) this winter, down 74.2% from the previous winter. The overall value of the energy market was $1.57 billion this winter, a 65.6% decline from last year’s $2.6 billion.

Winter demand peaked at 20,740 megawatts (MW) on Monday, January 21, 2019. The all-time peak in winter demand occurred on January 15, 2004, at 22,818 MW. Total electricity use for the winter was 31,156 gigawatt-hours, a 2.8 percent decrease from the previous year.

New programs and procedures were in place

Coming into the 2018/2019 winter, the ISO adopted new market and system operations initiatives based on lessons learned during the previous year. One of these initiatives forecasted the region’s available energy supplies for the next 21 days, and the other provided a market mechanism to ensure that limited fuel supplies are used when they are most valuable for system reliability and cost-effectiveness.

This season was also the first winter under the ISO’s pay-for-performance capacity market rules, which went into effect on June 1, 2018. The rules provide enhanced incentives, in the form of bonus payments and financial penalties, for resource owners to ensure their resources are ready and able to meet their obligations to provide energy and reserves or reduce demand during times of stress on the regional power system. There were no pay-for-performance scarcity conditions this winter.

Winter 2018/2019 and Change from Winter 2017/2018	Winter 2018/2019	Winter 2017/2018	Percentage Change
Average Wholesale Electricity Price ($/megawatt-hour*)	$43.65	$76.04	-74.2%
Average Natural Gas Price ($/MMBtu**)	$5.66	$10.01	-76.9%
Peak Demand	20,740 MW***	20,599 MW	+0.4%
Total Electricity Use	31,156 GWh***	31,920 GWh	-2.8%
Total Value of Energy Markets	$1.57 billion	$2.6 billion	-65.6%

* One megawatt (MW) of electricity can serve about 1,000 average homes in New England. A megawatt-hour (MWh) of electricity can serve about 1,000 homes for one hour. One gigawatt-hour (GWh) can serve about one 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. ***Since June 1, 2018, active demand-response resources have been able to participate on an hourly basis in the wholesale electricity markets. These resources reduce demand in real time.