With natural gas being the dominant fuel for electricity generation in New York, rising electricity prices are driven by the increased cost of gas because of the ongoing Russia-Ukraine War and increased LNG exports, according to a recent white paper by NYISO.
The paper, released Jan. 29, comes after a week of winter weather and elevated off-peak prices. It relied on the Short-Term Energy Outlooks (STEOs) by the Energy Information Administration and an analysis of electricity prices by Lawrence Berkley National Laboratory.
Prior to the surge in LNG exports, prices remained low because of the shale gas fracking boom of the late 2000s, just as President Barack Obama entered office. Around the same time, Russia began antagonizing Ukraine, culminating in the invasion and annexation of the Crimean Peninsula in 2014. Russia, which also controlled most of Europe’s supply of natural gas, cut off supply to Ukraine the same year.
To counter Russia’s aggression and lessen Europe’s dependency, the Department of Energy under Obama began in 2012 to issue approvals of LNG facilities for exports to countries with which the U.S. did not have free-trade agreements, a policy that continued under Presidents Donald Trump and Joe Biden — though Biden would unsuccessfully attempt to pause such exports in early 2024.
The U.S. became a net exporter of LNG in 2017 and the world’s leading exporter in 2023, according to a 2024 study at Harvard University. In its STEO for January 2026, EIA noted that LNG exports in 2025 increased by roughly 26% compared to 2024 exports, growing to an estimated 15 Bcfd.
“For context, U.S. residential gas customers consume approximately 12 billion cubic feet of gas per day,” the NYISO paper says. “In other words, the U.S. is forecast to export more natural gas than residential customers are expected to consume.”
The result has been a strong correlation between gas and electricity prices across the U.S., including in New York. The Transco Zone 6 pricing hub is the primary procurement site for the state’s gas fleet. In 2020, amid the COVID-19 pandemic, the price at the hub was $1.64/MMBtu. In 2022, Russia began its full-scale invasion of Ukraine, and exports to Europe — sent over pipelines that run through Ukraine — dwindled. The Transco 6 price shot up to $7.01/MMBtu.
The price for electricity followed the spike, from the record low of $25.70/MWh in 2020 to $89.23/MWh in 2022, according to the paper.
While prices for both electricity and gas fell in the short term, they gradually rose again over the next three years as LNG exports continued to grow. In 2024, gas traded on average at $2.10/MMBtu; by 2025 prices were hovering around $4.64/MMBtu. “The result was significantly higher wholesale prices for electricity as well — with an average price of $74.40/MWh throughout 2025, compared to $41.81/MWh for 2024,” the paper says.
The paper was published just after a Jan. 28 meeting of the Budget & Priorities Working Group in which stakeholders asked NYISO staff why energy prices were trading high when load was not near peak.
“We’re noticing right now that while the load isn’t great, the marginal cost of energy is very high,” said Kevin Lang, a lawyer representing the New York City and Multiple Intervenors.
Many stakeholders asked for specifics on hourly pricing, and what facilities on which pipelines were involved in setting daily natural gas prices.
“It’s not just as simple as ‘Transco 6 day-ahead cleared at X,’” said Doreen Saia, chair of natural resources law at Greenberg Traurig. “There’s a lot of factors going on.”
In an email, Lang told RTO Insider that the white paper did not answer his questions about why energy prices had been surging during periods of low demand, particularly in recent days. According to Yes Energy data, off-peak prices have been on average higher than on-peak prices over the past 10 days.
Barbara Kates-Garnick, a professor of the practice of energy policy at Tufts University and former Massachusetts Department of Public Utilities commissioner, said that rising price trends could be broadly attributed to natural gas prices, Trump’s energy export policy and demand.
“Exporting LNG does subject all burns over time to world markets,” Kates-Garnick said. “Global natural gas prices were something that we had to become more sensitive to” during her time on the DPU and as undersecretary of energy.
She said the question facing local policymakers is whether to invest in infrastructure or “cobble” solutions together to deal with emergent price spikes.
“We keep pushing this can down the road. Every time it emerges, we address it as if it’s a new problem,” she said. “It’s very frustrating.”
