Wholesale electricity market costs fell in spring 2024, market monitor’s report says

The spring of 2024 saw lower year-over-year costs for both energy and capacity, according to the latest quarterly report from ISO New England’s Internal Market Monitor (IMM).

The Spring 2024 Quarterly Markets Report, which covers the period from March 1 to May 31, presents an assessment of each of the region’s wholesale electricity markets, based on market data, performance criteria, and independent studies.

Key findings include:

• The total estimated wholesale market cost of electricity for spring 2024 was $1.10 billion, a decrease of 23% compared to spring 2023.
• Energy costs totaled $760 million; down 16% (or $140 million) from spring 2023 costs. The decrease was driven by a 29% year-over-year drop in natural gas prices, continuing a trend of lower gas prices since early 2023. Partially offsetting the impact of lower natural gas prices was a decline in imports and slightly higher demand compared to the previous spring.
• Capacity costs totaled $259 million, down 39% from the previous spring. The decrease was attributed to a lower Net Installed Capacity Requirement and higher surplus capacity in the 14th Forward Capacity Auction (FCA 14) compared to FCA 13. The payment rate for new and existing resources in spring 2024 was $2.00 per kilowatt-month, compared to $3.80 per kilowatt-month in spring 2023.