Six Billion Dollars for Three Months of Electricity
ISO-NE’s wholesale energy market recorded approximately $6 billion in transactions between December and February, the most expensive winter in the market’s 23-year history. The grid stayed reliable. The cost of that reliability deserves examination.
The cold. Average temperatures across New England ran 3.4 degrees Fahrenheit below normal for the season, the coldest winter in 20 years. ISO-NE reported a prolonged cold snap lasting 19 days. Average locational marginal prices reached $116.73 per megawatt-hour, the highest winter average since 2014.
The cost. Six billion dollars for three months of electricity in a region serving 15 million people. The previous comparable price spike occurred during Winter 2014, also driven by natural gas constraints. ISO-NE spent the subsequent decade building LNG import capacity and implementing fuel security reforms. The 2025/26 winter suggests those measures bought resilience but not price stability.
The fuel dependency. New England’s pipeline infrastructure, sized primarily for heating load, competes with power generation for the same gas supply during cold snaps. When heating demand spikes, gas prices follow. Generators bid those fuel costs into the wholesale market. Ratepayers absorb the result. This dynamic has persisted through multiple winter price events over the past decade without structural resolution.
The parallel. The same week ISO-NE published its winter recap, Brent crude cleared $100 per barrel as the Strait of Hormuz disruption entered its fourth week. Oil and natural gas are different commodities with different supply chains, but the underlying exposure follows the same pattern: electricity systems built around combustible fuels inherit the price volatility of global commodity markets. A pipeline constraint in New England and a naval chokepoint in the Persian Gulf produce similar outcomes for commercial electricity customers.
The contrast. New Jersey’s Board of Public Utilities approved incentives for three battery storage projects totaling 355 MW on March 5 and immediately opened a second solicitation for 645 MW, targeting 1,000 MW of transmission-scale storage under the Garden State Energy Storage Program. The projected ratepayer savings: $169 million over the program’s life. Governor Sherrill’s Executive Order 2, signed January 20, directed the Board to open the second tranche within 45 days. The Board met that deadline ahead of schedule.
One state is building infrastructure designed to reduce exposure to wholesale price volatility. New England just recorded the cost of not having enough of it. The scale difference between $169 million in projected storage savings and $6 billion in winter wholesale costs illustrates how far apart planning and exposure remain.
The capacity question. PJM, which includes New Jersey, filed on March 2 to extend its capacity price collar at roughly $325 per MW-day through the 2029/2030 delivery year, projecting $27 billion in customer savings versus uncapped prices. The filing includes an expedited interconnection track targeting battery storage and generator uprates to address 5,400 MW of data center demand in the pipeline. The next capacity auction is scheduled for June 30.
The tension is structural. Price caps protect ratepayers from the kind of cost explosions ISO-NE just experienced. They also suppress the revenue signals that attract new storage investment. PJM is attempting to resolve this by fast-tracking interconnection while capping compensation. Whether developers accept those terms will become visible in the auction results.
The limits. Battery storage does not eliminate winter peak demand. A four-hour lithium-ion system cannot replace 19 days of sustained cold-weather generation. But commercial behind-the-meter storage reduces the load that forces grid operators into emergency procurement. Every megawatt-hour of peak demand shifted or shaved is one fewer megawatt-hour purchased at elevated winter LMPs.
The investment case for commercial battery storage has historically centered on demand charge reduction and rate arbitrage. ISO-NE’s 2025/26 winter introduced a concrete data point for a third consideration: wholesale price exposure during sustained weather events. That exposure is now $6 billion, auditable, and three months old.
The question facing New England is not whether the next cold winter will be expensive. The 23-year price record answers that. The question is what gets built between now and then.
Sources
Winter 2025-2026 Recap: Grid Stays Reliable During Prolonged Cold (ISO Newswire)
2025/26 Most Expensive Winter in History of ISO-NE Markets (RTO Insider)
New Jersey Awards 355 MW Energy Storage, Seeks Another 645 MW (ESS News)
NJBPU Approves Battery Storage and Solar Awards (New Jersey Board of Public Utilities)
PJM Files Price Collar, Expedited Interconnection as Part of Large Load Plan (PJM Inside Lines)
Oil Soars Past $100 a Barrel Amid Iran War (Al Jazeera)