US POWER TRACKER: ISO-NE Jan spot power, gas prices boosted by storms; forwards lower

While ISO New England spot power and natural gas prices increased month on month and year on year in January due to winter storm impacts that lowered temperatures and increased power demand, forward power and gas prices have remained below year-ago levels.

ISO-NE Internal Hub on-peak day-ahead power prices reached a daily average high of $180/MWh on Jan. 16 when winter storms moved across the country. On-peak day-ahead power prices at the hub averaged $74.69/MWh in January, 83% higher than the December 2023 average of $40.79/MWh, and 41% higher than the January 2023 average of $52.94/MWh, according to ISO data.

Connecticut Hub on-peak day-ahead power prices reached slightly above $180/MWh on Jan. 16 and averaged $73.62/MWh for the month which was almost 86% higher month on month and about 46% higher than the Jan. 2023 average of $50.27/MWh.

Algonquin city-gates gas prices also saw a boost from the storms, rising above $15/MMBtu from Jan. 13 to Jan. 17. Gas prices at the hub had averaged just $4.26/MMBtu from Jan. 1 through Jan. 12. Spot gas prices for January averaged $7.68/MMBtu, which was 138% higher than the December 2023 average of $3.23/MMBtu, and 63% higher than the January 2023 average of $4.72/MMBtu.

The average January temperature across the ISO-NE footprint was 31.6 degrees Fahrenheit, compared with a December 2023 average of 39.3 F, according to CustomWeather data. The historical average January temperature was 28.8 F.

Heating degree days increased from an average of 25.1 in December 2023 to an average of 32.9 in January 2024.

ISO-NE power demand increased 6.6% month on month in January with peakload averaging 16,859 MW compared with an average of 15,820 MW in December, according to ISO data. Peakload topped out at 18,277 MW on Jan. 17 when the winter storms brought lower temperatures.

Mass Hub on-peak forward power prices for March averaged $41.94/MWh through Feb. 15, according to Platts M2MS data and the forward package for April averaged $32.40/MWh over that period.

Forward power prices at the hub for March were 33% lower year on year and 9% lower month on month in January trading.

S&P Global Commodity Insights power market analysts project on-peak power prices to "remain moderate" throughout the year with an average of $50/MWh in 2024, according to a recent research note.

Algonquin city-gates forward gas prices for March averaged $4.46/MMBtu in January trading, about 42% lower year on year and 7% lower month on month. The forward package for April was down 33% in January trading and down 0.21% month on month.

Power generation fuel mix

Gas-fired power accounted for 54.3% of the ISO-NE fuel mix in January, down slightly from 52.4% in December and up from 48% in January 2023 when gas prices were much higher.

Nuclear power accounted for 25.3% of the January power generation fuel mix, down from 26.1% in December and 29.3% in January 2023.

Hydropower supplied 9.8% of the generation mix in January, down from 10.3% in December and 11.9% in January 2023.

Solar power, wind power and small volumes of other resources made up the balance of the region's power generation fuel mix.

Capacity auction results

ISO New England's annual power capacity market auction(opens in a new tab) secured capacity commitments of 31,556 MW to be available in the 2027/2028 commitment period, at a preliminary price of $3.58/kW-month, compared with last year's clearing prices that ranged from $2.55/kW-month to $2.59/kW-month across different pricing locations.

The auction results released Feb. 9 showed that nearly 1,085 MW of incremental renewable energy, energy storage, and demand-reducing resources secured obligations in Forward Capacity Auction 18, the ISO said.

Load parameters in the demand curve for FCA 18 closely tracked FCA 17 levels, but pricing parameters increased. The cost of building power generation has increased due to inflationary pressure, and this was reflected in the FCA 18 demand curve, according to analysis from S&P Global Market Intelligence.

The last four FCAs cleared at less than $4/kW-month, with the combination of low load growth, increasing renewable energy capacity and few retirements working to suppress capacity prices, the analysis said.

Of note, FCA 19, covering the reliability year 2028/2029, has been postponed to 2026 from 2025.