Winter wholesale power prices fell year over year in New England, market monitor’s report says

Lower natural gas prices drove a year-over-year decline in the region’s wholesale electricity costs in the winter of 2023, according to the latest quarterly report by ISO New England’s Internal Market Monitor (IMM).

The Winter 2023 Quarterly Markets Report, which covers the period from December 1, 2022, through February 28, 2023, presents an assessment of each of the region’s wholesale electricity markets, based on market data, performance criteria, and independent studies.

Highlights include:

• The total estimated wholesale market cost of electricity for winter 2023 was $3.31 billion, down 23% from $4.29 billion last winter. The cost per megawatt-hour (MWh) of load served was $110, compared to $137 for winter 2022.
• Energy market costs totaled $2.64 billion, down 29% from $3.73 billion last winter. Natural gas prices fell 37% year over year, driving the decrease in energy costs.
• Capacity costs totaled $629 million, up 26% from the previous quarter and up 19% from the previous winter. Beginning in summer 2022, capacity costs include supplemental payments to two units at the Mystic Generating Station. These payments totaled $213 million in winter 2023, and caused year-over-year capacity costs to increase despite lower clearing prices in the 13th Forward Capacity Auction (FCA 13). This winter’s capacity payment rate for new and existing resources was $3.80 per kilowatt-month (kW-month), compared to $4.63/kW-month for the previous winter.