Market monitor: New England wholesale electricity market costs down 43% in fall 2023

New England’s total estimated wholesale market cost of electricity was down 43% year over year in fall 2023, according to the latest quarterly report by ISO New England’s Internal Market Monitor.

Significantly lower natural gas prices drove lower energy costs—which, coupled with lower capacity costs, accounted for the overall decline in the season’s wholesale market costs.

The Fall 2023 Quarterly Markets Report, which covers September 1, 2023 through November 30, 2023, presents an assessment of each of the region’s wholesale electricity markets, based on market data, performance criteria, and independent studies.

Other findings include:

• The total estimated wholesale market cost of electricity for fall 2023 was $1.35 billion, compared to $2.39 billion for fall 2022. The cost per megawatt-hour (MWh) of load served was $49, compared to $89 for the previous year.
• Energy market costs totaled $1.00 billion, down 46% from $1.85 billion in fall 2022. Natural gas prices were down 63% year over year.
• Capacity costs totaled $259 million, down 39% from $423 million in fall 2022. Lower capacity clearing prices from the 14th Forward Capacity Auction (FCA 14) accounted for the drop. The fall 2023 payment rate for new and existing resources was $2.00 per kilowatt-month (kW-month), compared to $3.80/kW-month in fall 2023.
• Total demand for electricity from the grid rose 3% year over year in fall 2023, due to warmer temperatures in early September.