ISO New England operates wholesale electricity markets covering most of New England. It employs two independent market monitors -- one internal to ISO-NE, one a hired external consultant -- to regularly review, analyze, and report on market results, and offer recommendations on market improvements.
Potomac Economics serves as the External Market Monitor for ISO-NE. In this role, it is charged with evaluating the competitive performance, design, and operation of the wholesale electricity markets operated by ISO-NE. Last month, the external market monitor released its "2015 Assessment of the ISO New England Electricity Markets" (102-page PDF), presenting its perspective on the New England electricity markets.
Among other findings, the report notes that energy market trends "have been dominated by reductions in fuel prices over the last two years. In particular, from 2014 to 2015:
- Natural gas prices declined more than 40 percent, falling to multi -year lows in mid -2015 largely because of higher shale production from the Marcellus and Utica regions; and
- Fuel oil prices fell by more than 35 percent because of increased global supply, and world liquefied natural gas (LNG) prices have fallen similarly. These reductions helped limit the increase in natural gas prices during tight gas supply conditions in the winter.
ISO New England's internal market monitor released its 2015 Annual Markets Report earlier this year. That report similarly found that overall, "the ISO New England capacity, energy, and ancillary service markets performed well in 2015."