Emissions Costs Drive Wholesale Electricity Price Hike in New England

The latest quarterly report from ISO New England's Internal Market Monitor shows that despite lower natural gas prices, wholesale electricity costs rose in the spring of 2026.

Natural gas prices averaged $2.79 per million British thermal units in the spring of this year, down 18% compared to the previous spring and significantly below the average for winter 2025/2026.

However, emissions-related costs increased by 65% year over year for a typical natural gas generator due to tightening emissions caps under the Regional Greenhouse Gas Initiative and Massachusetts Electric Generator Emissions Limits. Additionally, the share of supply from nuclear resources decreased due to refueling outages, causing less-efficient generators to set energy prices more often.

The report also found that electricity demand rose by 2% in mid-May during an unseasonably warm period, leading to higher total estimated wholesale market costs of $1.75 billion, up 6% from spring 2025. Energy costs increased by 16%, while capacity costs declined by 26% year over year.