Merchant revenues for CAISO’s batteries averaged $1.95/kW-month in November 2025. That’s the lowest value of the Modo Energy BESS CAISO index on record. The next-lowest index reading is $2.26/kW-month, seen last December.

Average revenues fell $1.37/kW (-41.4%) year-over-year. The month-over-month decline was similarly steep: revenues decreased $1.04/kW (-35%) from October 2025’s $2.99/kW-month.

The drop-off in day-ahead Energy revenues was particularly notable. Last month, CAISO’s batteries earned $2.17/kW from day-ahead Energy arbitrage, more than merchant revenues from all sources in November 2025.

Day-ahead arbitrage revenues decreased due to a steep decline in arbitrage opportunities. Four-hour top-bottom (TB) spreads fell nearly 30%, both month-over-month and year-over-year, to just $3/kW — leaving little room for profitable arbitrage.

Read last month’s report here.

For any questions about CAISO research or benchmarking, reach out to logan@modoenergy.com.

Battery revenues are on track for $40/kW in 2025

Price spreads have been low in CAISO throughout 2025 (read our August, September, and October benchmark reports for more).

If that trend continues through December, fleet-wide average revenues are likely to land just below $40/kW for the year. That would be a 50% decrease from 2023 ($80/kW), and a 23% haircut relative to 2024 ($51/kW).

2025 has been a year of exceptionally mild weather in California, which has frequently been pointed out in this series of reports as the primary reason CAISO’s wholesale electricity markets have been so calm. Without large heating- and cooling-induced demand swings, there are few moments for lucrative arbitrage opportunities.

NOAA’s latest winter weather outlook makes the case for a warmer December. Any volatility that does realize next month will likely not be caused by extreme weather.

Demand fell year-over-year, and midday natural gas operations pushed up charging prices

CAISO’s around-the-clock (ATC) average load for November 2025 was 22.19GW (-1.7% y/y). Less demand on the grid has mixed effects on battery revenues, as lower load in the middle of the day reduces charging prices, while smaller load peaks point to lower discharge prices.

But the fact that ATC net load rose 1.9% (16.14 → 16.46GW) and solar generation decreased 3.2% (3.1 → 3.0TWh) points to higher prices in the middle of the day. Higher charging prices compressed arbitrage spreads, reducing revenue opportunities relative to November 2024.

Natural gas plants stepped in to replace the lower solar output. Total gas generation increased to 5.44TWh (+4.9%), while peak natural gas output fell to 9.55GW (-3.2%). Together these two facts mean that there was more natural gas generation in off-peak hours, i.e. in the middle of the day.

At the same time, the marginal cost for those natural gas plants was 53.8% higher than last year (1.97 → $3.02/mmBTU). This provided more upward pressure on BESS charging prices, as the marginal supplier of electricity in the middle of the day bid up electricity prices.

Ancillary Services revenues could not offset the arbitrage losses: volume-weighted regulation prices nearly halved year-over-year.

Higher effective load and greater gas participation flattens price profiles

November 2025 saw more gas-generated electricity than a year prior. Whereas the typical day in November 2024 had around 3.8GW of gas generation at noon, average natural gas output never dipped below 5GW last month.

And as natural gas plants shifted the supply curve up by selling the same quantity of Energy for a higher price, battery charging needs pushed up the demand curve for Energy. “Effective load” — net load plus BESS charging — between the hours of 10am and 4pm increased by 5.6GWh since November 2024.

These two factors together flatten price profiles, leaving less opportunity for the Energy arbitrage that provides the bulk of merchant revenues.

The combination of higher gas-driven charging costs and growing battery competition created consistently challenging conditions throughout November. But the worst stretch came mid-month, when a particular weather pattern turned already-slim arbitrage opportunities into likely losses for some batteries.

La Niña weather patterns made for a calm November 2025

Average battery revenues decreased 41.4% year-on-year, landing at $1.95/kW for the month of November 2025.

And throughout the month, daily revenue readings were stable. Only five days near the beginning of the month (the 1st-2nd & 7th-10th) saw total merchant revenues land north of $100/MW. More than half the days in 2024 were at least as high.

Fleet-wide revenues were less than $40/MW-day for six consecutive days in the middle of November 2025 (the 12th-17th). Remarkably, day-ahead Energy arbitrage only accounted for 25% of the revenue stack for these days. Historically IFM Energy makes up more than 75% of the BESS revenue stack.

Those six sub-$40/MW days coincided with warm and rainy La Niña weather patterns on the West Coast. (These patterns are the same ones NOAA expects to lead to a warm December.) Average daily highs across California dipped below their monthly average, and average daily lows floated above theirs.

Balmy weather with little solar output like this meant Energy price profiles were flat — and arbitrage opportunities virtually nonexistent. The average difference between the daily peak and trough prices for November 12th-17th was just $14.8/MWh.

With little chance for arbitrage in the day-ahead markets, BESS were dispatched to handle demand fluctuations in real-time. In a very rare occurrence, CAISO’s battery fleet became a net exporter in the middle of the day on November 15th. Real-time revenues would eventually go on to make up the majority of battery cash flows (56%) over the course of these six days.

Zonal patterns reverse: batteries in SP15 saw more arbitrage opportunity in November 2025

California’s central ZP26 zone has been home to the highest TB4 spreads for the past several months. The zone’s proximity to the sunny SP15 area and its limited transmission capacity to the northern NP15 congestion zone meant it was exposed to solar-like price profiles despite solar plants not having a large footprint in the region.

But in the most recent month, SP15 saw the most opportunity for Energy arbitrage. The median TB4 Spread there was $3450/MW, as compared to $3069/MW for ZP26 and $2573/MW for NP15.