Cold winter drove higher energy prices, market monitor finds

The past winter was the coldest in a decade, driving the highest energy costs since 2014, ISO New England’s Internal Market Monitor (IMM) found in its latest quarterly report.

The IMM’s Winter 2025 Quarterly Markets Report, which covers Dec. 1, 2024, through Feb. 28, 2025, presents an assessment of each of the region’s wholesale electricity markets, based on market data, performance criteria, and independent studies.

At 28° Fahrenheit, the average winter temperature was six degrees colder than winter 2023/2024 and the coldest since winter 2014/2015, the report said. Average hourly load, a measure of seasonal electricity demand, reached 14,835 megawatts this winter. This was 7% higher than last winter, and the highest since winter 2014/2015.

Key findings include:

• The total estimated wholesale market cost of electricity for the winter was $4.5 billion, up 116% from the $2.09 billion reported for winter 2023/2024.
• Energy market costs totaled $4.03 billion, 147% higher than the previous winter. The season’s average real-time energy price was $114.80 per megawatt-hour (MWh) and the day-ahead energy price was $116.73/MWh.
• Increased energy costs were driven by natural gas prices, which were up 179% year over year. The report also notes the region’s generators used more oil than average, and that the region’s interstate pipelines received twice the volume of liquefied natural gas as the previous winter.
• Capacity costs totaled $359 million, up 39% from the previous winter due to higher clearing prices from the 15th Forward Capacity Auction.

The report also examines the second winter of the ISO’s two-year Inventoried Energy Program, which compensated certain resources for providing fuel security during cold periods. Similar to the prior winter, the cost of the program during winter 2024/2025 was $78 million, about 2% of total wholesale market costs. The ISO does not plan to continue the Inventoried Energy Program, instead focusing on mechanisms to better ensure energy availability through its Capacity Auction Reforms key project.