New England Wholesale Electricity Costs Rose Nearly 50 Percent in 2025: ISO-NE

ISO New England on June 3 reported that wholesale electricity costs in the six-state region increased sharply in 2025 as higher natural gas prices, carbon pricing programs, and tighter supply conditions pushed electricity market prices higher. The grid operator’s latest Annual Markets Report concluded that wholesale electricity markets remained competitive despite rising costs.

Total wholesale electricity costs reached $15 billion in 2025, an increase of nearly 50 percent from 2024 levels. On an energy basis, costs averaged $127 per megawatt-hour of electricity served.

Natural gas remained the dominant driver of electricity prices in New England. Average natural gas prices more than doubled from 2024, increasing to $6.27 per million British thermal units. The higher fuel costs contributed to substantial increases in both day-ahead and real-time electricity market prices, which rose more than 65 percent year over year.

Carbon pricing programs also contributed to higher electricity costs in 2025. Those programs added an estimated $9 per megawatt-hour to average energy prices, accounting for roughly $1.1 billion in wholesale electricity costs across the region.

Supply constraints further intensified market pressures. Net electricity imports into New England declined to their lowest level in more than a decade as reduced hydropower production and an extended nuclear outage in Canada limited available imports. As a result, higher-cost generation resources within New England more frequently set wholesale market prices.

Looking ahead, recently completed and planned transmission investments, along with new offshore wind generation projects, could expand regional supply capability and help accommodate expected growth in electricity demand over the next decade. The report also includes recommendations aimed at improving market design and strengthening long-term system reliability.