In general, the two main drivers of wholesale electricity prices in New England are the cost of fuel used to produce electricity and consumer demand.
Power Plant Fuel:
Natural gas dominates electricity generation in New England, accounting for 52% of total power production in 2022. This reliance on natural gas makes wholesale electricity prices closely tied to natural gas prices.
Electricity demand is influenced by weather and economic factors. For example, July 2023 experienced a 0.9% decrease in energy usage compared to July 2022, with weather conditions being a primary driver. Peak demand occurs during hot weather.
Resource Mix and Emissions:
Natural gas and nuclear power generated 81% of New England’s electricity in July 2023. Renewable energy sources, including wood, wind, and solar, contributed 9%. Coal and oil resources made up a small fraction of the energy mix. New England’s power generation also produced an estimated 3.31 million metric tons of CO2 in July 2023, with natural gas being the largest contributor to emissions.
As always, contact your Energy Advisor for more information.