Winter 2018 markets report reviews wholesale market outcomes during December 2017 and January and February 2018

The Winter 2018 Quarterly Markets Report prepared by the Internal Market Monitor (IMM) of ISO New England reviews wholesale energy market outcomes for the three-month period from December 1, 2017, through February 28, 2018.

The Winter 2018 Quarterly Markets Report notes that the total wholesale cost of electricity (including energy, capacity, and ancillary services) during the three-month period was $3.43 billion, double the market value of $1.7 billion during the winter of 2017. The value of the energy market alone was $2.6 billion, an 89% increase over winter 2017 costs. The increases were driven by the historic 15-day cold snap from December 26, 2017, through January 9, 2018, which alone accounted for 40% of total energy costs for the season. The period from December 26, 2017, through January 7, 2018, was the coldest 12-day stretch since 1980 in New England. The frigid temperatures pushed up natural gas prices, resulting in higher wholesale power prices. During the 12-day stretch, high natural gas prices as well as unplanned generator outages resulted in real-time prices averaging $179/MWh. The higher total cost of the wholesale markets was also affected by higher Forward Capacity Market prices, totaling $770 million for the period.

The average day-ahead and real-time wholesale energy prices were $74.33 per megawatt-hour (MWh) and $76.04/MWh, respectively. The day-ahead average was 79% higher than the previous winter’s $32.76/MWh, while the real-time average price was 91% higher than the winter 2017 real-time average of $36.15. The year-over-year increase was driven by natural gas prices that were 93% higher, averaging $10.20 per million British thermal units (MMBtu) compared to the $5.29/MMBtu average price during the previous winter.

The quarterly report includes a section on market performance during the December/January cold spell, as well as a section reviewing the results of the 12th Forward Capacity Market Auction (FCA #12). The report concludes that the auction was competitive.