Monthly wholesale electricity prices and demand in New England, February 2024

Wholesale power prices averaged $31.52 per megawatt-hour (MWh) in the Real-Time Energy Market in February 2024, down 52% compared to the previous year.¹ Day-Ahead Energy Market averages were $36.59/MWh, down 47% from February 2023.

By the numbers

February 2024 and Percent Change from February 2023 and January 2024	February 2024	February 2023	January 2024
Average Real-Time Electricity Price ($/megawatt-hour)	$31.52	-51.7%	-50.5%
Average Natural Gas Price ($/MMBtu)	$3.49	-57.1%	-54.6%
Peak Demand	17,199 MWs	-12.5%	-6.7%
Total Electricity Use	9,496 GWh	1.8%	-12.7%
Weather-Normalized Use2	9,484 GWh	-2.4%	-15.3%

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 55% of the power produced in 2023 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 $3.49 per million British thermal units (MMBtu).³ The price was down 57% from the February 2023 average Massachusetts natural gas index price of $8.13/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.

Wholesale electricity and natural gas prices

Electricity demand

Demand is driven primarily by weather, as well as economic factors. Energy usage during February increased 1.8% to 9,496 GWh from the 9,327 GWh used in February 2023. The average temperature during February was 34˚ Fahrenheit (F) in New England, up 1˚ from the previous February. The average dewpoint, a measure of humidity, was 22˚F in February, up 2˚ from the previous February. There were no cooling degree days (CDD) during February, which is typical for New England.⁴ In February 2023, there were no CDD. There were 903 heating degree days (HDD) during February, while the normal number of HDD in February is 1,010 in New England. In February 2023, there were 892 HDD.

Consumer demand for electricity for the month peaked on February 14 during the hour from 6 to 7 p.m., when the temperature in New England was 28°F and the dewpoint was 6°. Demand reached 17,199 MW. The February 2024 peak was 12.5% lower than the February 2023 peak of 19,662 MW, set during the hour from 6 to 7 p.m. on February 3, when the temperature was 4°F and the dewpoint was -19°.

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.

Monthly peak demand and total and weather-normalized energy use

Fuel 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 76% of the 7,989 GWh of electric energy generated within New England during February, at about 47% and 29%, respectively. Renewable resources generated about 14% of the energy produced within New England, including 5.3% from wood, refuse, and landfill gas; 4.5% from wind; and 3.8% from solar resources. Coal- and oil-fired resources did not produce a statistically significant amount of electricity. Hydroelectric resources generated 9.4%. The region also received net imports of about 1,671 GWh of electricity from neighboring regions.

February generation in New England, by fuel source

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.⁵

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

New England power plants produced an estimated 2.1 million metric tons of CO₂ in February 2024, a 5.4% decrease from the previous February.⁶    

Estimated CO₂ emissions from natural gas-fired plants—typically the region’s largest source of power system emissions, due to the significant amount of electricity these resources produce—rose 7% year over year, from 1.4 million metric tons to around 1.5 million metric tons. These resources accounted for 71% of the power system’s estimated emissions.

Together, oil- and coal-fired resources produced an estimated 2,985 metric tons of CO₂ in February 2024 (about 0.1% of the total), down from an estimated 245,398 metric tons in February 2023. Because the region’s wholesale electricity markets select the lowest-priced resources needed to meet demand, oil- and coal-fired resources tend to run more frequently when natural gas prices rise, and less frequently when natural gas prices are low.

CO₂ emissions from other resources—mostly refuse and wood—were estimated at 599,485 metric tons, up 6% from February 2024. These resources accounted for about 29% of the power system’s estimated CO₂ emissions for the month.

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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.

⁵The factors used to calculate estimated CO₂ emissions were updated in January 2024. ISO New England analysts regularly review and refine the methodology used to develop these emissions factors, in order to reflect the characteristics of New England’s generating fleet and improve the accuracy of the estimates.

⁶Observations drawn from year-over-year comparisons provided in this month’s report should consider that February 2024 had 29 days, while February 2023 had 28.

_{Historical weather data provided by DTN, LLC.; Underlying natural gas data furnished by ICE.}