March 23, 2023

Monthly wholesale electricity prices and demand in New England, February 2023

Prices down in both day-ahead, real-time markets in February

Wholesale power prices averaged $65.21 per megawatt-hour (MWh)¹ in the Real-Time Energy Market in February 2023, down 40% compared to the previous year. Day-Ahead Energy Market averages fell to $69.35/MWh, down 41% from February 2022.

By the numbers

February 2023 and Percent Change from February 2022 and January 2023	February 2023	February 2022	January 2023
Average Real-Time Electricity Price ($/megawatt-hour)	$65.21	-40.0%	29.1%
Average Natural Gas Price ($/MMBtu)	$8.13	-44.3%	72.2%
Peak Demand	19,645 MW	6.2%	13.6%
Total Electricity Use	9,323 GWh	-3.4%	-8.9%
Weather-Normalized Use²	9,692 GWh	-1.6%	-11.5%

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 52% of the power produced in 2022 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 February was $8.13 per million British thermal units (MMBtu)³. The price was down 44% from the February 2022 average Massachusetts natural gas index price of $14.59/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.

February wholesale electricity and natural gas prices, 2003-2023

Electricity demand

Demand is driven primarily by weather, as well as economic factors. Energy usage during February decreased 3.4% to 9,323 GWh from the 9,654 GWh used in February 2022. The average temperature during February was 33˚ Fahrenheit (F) in New England, up 2˚ from the previous February. The average dewpoint, a measure of humidity, was 20˚F in February, the same as the previous February. There were 892 heating degree days (HDD) during February, while the normal number of HDD in February is 1010 in New England.⁴ In February 2022, there were 948 HDD. There were no cooling degree days in February, which is typical for the region.

Consumer demand for electricity for the month peaked on February 3 during the hour from 6 to 7 p.m., when the temperature in New England was 4°F and the dewpoint was -19°. Demand reached 19,645 MW. The February 2023 peak was 6.2% higher than the February 2022 peak of 18,500 MW, set during the hour from 6 to 7 p.m. on February 14, when the temperature was 16°F and the dewpoint was -7°.

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.

February monthly peak demand and total and weather-normalized energy use

Resource mix and emissions

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 about 74% of the 7,756 GWh of electric energy generated within New England during February, at about 46% and 28%, respectively. Renewable resources generated about 12% of the energy produced within New England, including 5.2% from wood, refuse, and landfill gas; 3.8% from wind; and 2.7% from solar resources. Coal resources generated 1%, while oil-fired resources generated 2.9%. Hydroelectric resources generated 10.1%.

The region also received net imports of about 1,712 GWh of electricity from neighboring regions.

February generation in New England

The mix of resources used to produce the region’s electricity is a key driver of carbon dioxide (CO₂) emissions. The ISO estimates these emissions through an analysis that blends data on electricity generation by fuel type with an emissions factor for each fuel that is based on data from the Environmental Protection Agency.

February estimated CO₂ emissions in New England, by fuel source (metric tons)

New England power plants produced an estimated 2.24 million metric tons of CO₂ in February 2023, down 3.7% from February 2022.

Estimated CO₂ emissions from natural gas-fired plants—typically the largest source of emissions, due to the significant amount of power these resources produce—fell 4% year over year, from 1.45 million metric tons to 1.40 million metric tons, and accounted for 63% of the power system’s estimated emissions.

Oil-fired resources produced an estimated 192,102 metric tons of CO₂, a year-over-year increase of 24%. These resources accounted for 8.6% of the region’s total estimated CO₂ emissions in February. Coal-fired resources produced an estimated 82,016 metric tons of CO₂, about 3.7% of the total and a year-over-year decrease of 8%.

CO₂ emissions from other resources—mostly refuse and wood—were estimated at 560,321 metric tons, down 10% from last year. These resources accounted for 25% of the power system’s estimated CO₂ emissions for the month.

_{¹One 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 1,000 homes for one hour. One gigawatt-hour (GWh) can serve about 1 million homes for one hour.}

_{²Weather-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.}

_{³A 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.}

_{⁴A 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.}