New England faced an electricity emergency Christmas Eve; the lights stayed on, but the price of power skyrocketed more than eightfold

On Christmas Eve, after a brutal winter storm had swept from one coast to the other and left millions of people in the dark - including 200,000 in the western and northernmost parts of New England - a series of events created an emergency situation for the regional power grid over a couple of hours that afternoon.

In a report issued after the event, ISO New England, which oversees the New England electrical grid from its headquarters in Holyoke, discusses everything that went wrong that day - and just how close New England came to not having enough electricity to power all of its homes and businesses on Dec. 24 had just one more thing gone wrong. The report blames a combination of factors including sudden shortages of the natural gas that is burned to produce more than half our electricity, New England power plants unexpectedly going offline and neighboring grids in New York and Quebec not delivering all of the power they'd been expected to.

Over two hours that afternoon, ISO quickly ratcheted up its emergency alerts, to the point it was just one step from beginning to ask power-plant operators to reduce voltage to try to conserve energy, which consumers might have noticed in the form of dimmer lights.

The problems, in particular a lack of adequate natural gas caused by pipelines in other parts of the country freezing in the brutal cold, affected utilities all along the East Coast. In North and South Carolina, the main electricity provider instituted rolling blackouts to deal with crisis; New England's grid never got near that point, according to the ISO report.

In New England, generating plants that could either switched from natural gas to oil or turned pure oil generators. Normally, burning natural gas accounts for 55% of New England's electricity generation and oil less than 1%, but on that day, oil became New England's top producer of electricity, according to ISO data.

The day before Christmas started as normal as it could in a region that had been hit hard the day before by a storm that had left 200,000 people - most well outside the Boston area - without power. In its daily morning report, issued at 8:30 a.m., ISO forecast it would have 946 MW of surplus capacity ready for peak time, so even if New England used more than the peak forecast amount of 17,510 MWs, the region should be fine.

But as the day progressed, things started going wrong - and then kept going wrong.

The temperatures across the region never reached the predicted highs for the day, meaning increased demand for heating. Most New Englanders don't use electricity for heating - just 15.6% do (17.8% in Massachusetts) - so by itself, that shouldn't have been too much of an issue. But, ISO writes in its report on the day:

As the operating day progressed, the region experienced numerous unexpected generator outages and reductions totaling approximately 2,150 MW and neighboring areas under-delivered energy.

The region was still generating and importing enough electricity to keep all those lights and microwaves and elevators running, but we were running out of the reserve capacity needed to fill any unexpected surges, or gaps caused by generating plants suddenly going offline.

One power-plant owner told ISO it would turn on a 275 MW plant, and ISO asked other generators to turn on whatever plants they could, which would have meant another 380 MW of capacity, but that wasn't enough, because shortly before 4 p.m., the grid was hit with "a significant reduction of a large generating station," i.e., a large plant somewhere suddenly shut down - ISO did not identify which plant or why.

At 4 p.m., after that one large plant cut out, ISO declared an "Abnormal Conditions Alert," the lowest of its emergency alerts, basically putting utilities on notice that the region is facing potential issues.

At 4:30 p.m., ISO declared an "energy emergency alert" and said there was a "capacity deficiency. Power-plant owners were asked to do whatever they could to increase the amount of electricity they were generating. ISO said it would let operators turn on generators that normally would take 30 minutes to spin up to full power generation.

At 4:40 p.m., the drawing down of the "System 30 Minute Operating Reserve constraint" triggered "capacity scarcity condition pricing" in the real-time price of wholesale electricity in the region - from around $300 per MWh earlier in the day to a peak of $2,815. This extra-high pricing remained in effect until after 6 p.m. Even the lower amount was itself higher than the typical pricing on a normal day - such as Jan. 2, when pricing ranged from about $28 per MWh to $107 per MWH.

At 4:45 p.m., ISO went to the next in its series of emergency levels, asking power companies to try to curtail their own energy use, which might free up another 40 MWs of energy.

Around 5:30 p.m., ISO lost another 350 MW of electricity from New England plants - again, it did not identify which ones - and moved the alarm two steps higher, to a level at which it could try to buy emergency electricity from either New England generators that had not yet stepped up, or from similar power grids in New York, Quebec and New Brunswick - on a day when New York and Quebec were already sending less power into New England than originally planned.

But then the grid lucked out: New England made it to the end of peak time at 6 p.m. without having to buy additional power, at potentially expensive rates, as we followed our usual Christmas Eve pattern and began using less electricity. And, ISO continued, power imports to the region, as initially promised by New York and Quebec, began to increase.

Starting at 6:05 p.m., ISO began dropping the severity of its alerts. At 6:05 pm., the "capacity scarcity condition pricing" was ended, immediately dropping prices from $2,815 per MWh to $519. By 7 p.m., all of the other alerts were also cancelled, save for the original low-level "abnormal conditions alert," which remained in effect until 9 p.m.

ISO New England emergency plans for the winter of 2022-2023.
Power System Status Descriptions - defines the various alert statuses mentioned above - we go to OP 4, Action 5.

H/t Nathan G. Phillips.