Natural gas prices drive spring wholesale electricity cost up 78% compared to spring 2021, market monitor’s quarterly report says

Rising natural gas prices continued to drive up the region’s wholesale market cost of electricity in the spring of 2022, resulting in a 78% increase over the spring of 2021, according to the latest quarterly report by ISO New England’s Internal Market Monitor (IMM).

The Spring 2022 Quarterly Markets Report, which covers the period from March 1, 2022, through May 31, 2022, presents an assessment of each of the ISO’s wholesale electricity markets, based on market data, performance criteria, and independent studies.

Highlights include:

• The total estimated wholesale market cost of electricity for the spring of 2022 was $2.65 billion, up 78% from $1.49 billion last spring, driven by a substantial increase in natural gas prices. The cost per megawatt-hour (MWh) of load served was $99, compared to $56 for the spring of 2021.
• Energy market costs totaled $2.09 billion, up 142% from $865 million last spring. Natural gas prices drove the increase, rising 155% compared to the spring of 2021.
• Capacity costs totaled $533 million, down 12% from $607 million last spring. Lower capacity clearing prices from the 12th Forward Capacity Auction (FCA 12) accounted for the drop. This spring’s payment rate for new and existing resources was $4.63 per kilowatt-month (kW-month), compared to $5.30/kW-month last spring.