​Winter Storm Fern drove high prices and volatility in New York. Late-January’s sudden drop in temperatures triggered price spikes across the state. Real-Time prices reached $1,942/MWh on January 24 and Day-Ahead prices peaked at $1,006/MWh a few days later.

Day-Ahead TB1 spreads averaged $108/MW/day in January. Real-Time TB1 spreads hit $184/MW/day. Both were the highest of the past 12 months.

The storm lifted upstate Reference Prices, a key input for NYSERDA's Index Storage Credit (ISC) program, by 74-90% year-over-year. Upstate zones converged with traditionally more lucrative downstate zones. For developers competing for ISC contracts, this signals improved competitiveness for upstate projects under extremely low temperatures.

This is the first edition of Modo Energy's benchmark report for battery revenues in NYISO.

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Why do Reference Prices matter for NYISO batteries?

Grid-scale batteries in NYISO will need ISC contracts to pencil. Merchant revenues alone do not cover costs. Under the ISC, NYSERDA pays the difference between a project's Strike Price, which developers bid based on their costs, and the Reference Price, a proxy for market revenue.

The Reference Price is the sum of two components: the Reference Capacity Price (RCP), based on UCAP spot prices and Capacity Accreditation Factors (CAFs), and the Reference Energy Arbitrage Price (REAP), based on Day-Ahead zonal TB spreads for a given battery duration. This report uses a 4-hour battery to illustrate how these prices moved.

Higher Reference Prices benefit developers in two ways. First, they reduce the ISC payment needed from NYSERDA, improving bid scores and increasing the likelihood of winning a contract. Second, projects in high Reference Price zones could bid a slightly higher Strike Price while remaining competitive, improving project economics.

January's surge in upstate Reference Prices shows how winter volatility can shift the competitive landscape in favor of those zones.

How did Reference Prices converge across New York?

In January 2025, downstate Reference Prices were roughly double some upstate zones. NYC cleared at $115/MW-day while West cleared at just $55/MW-day

January 2026 narrowed that gap. NYC rose to $130/MW-day, up 14% year-over-year. West reached $95/MW-day, up 74%. North saw the largest gain at 90%, climbing from $59/Mw-day to $112/MW-day.

The result: upstate zones that previously lagged by $50-60/MW-day trailed by only $20-35/MW-day last month.

What drove upstate's outsized gains?

Colder temperatures drive higher heating demand, which pushes more expensive generators onto the margin and widens the spread between peak and off-peak prices.

The cold snap hit upstate harder than downstate. Albany's average lows dropped to near 0°F during the storm period, and Buffalo fell to 3°F. Lows in New York City and Long Island were less extreme, at 12°F and 11°F., respectively.

Asymmetric weather drove asymmetric prices. West's Day-Ahead TB4 spreads nearly doubled year-over-year, from $145/MW-day to $286/MW-day. North's doubled as well, from $161/MW-day to $352/MW-day.

Downstate zones saw smaller gains or outright declines. Long Island's Real-Time TB4 spreads fell 12% year-over-year.

What role did capacity prices play?

REAP drove the convergence in Reference Prices, but RCP contributed modestly.

Zones A through E’s RCP rose from $0.57/kW-month to $0.74/kW-month, a 28% increase YoY. NYC's RCP actually fell from $1.37/kW-month to $1.23/kW-month, down 10% YoY, reflecting a 23% decline in NYC UCAP spot prices.

But, West's REAP doubled from $36.29/MW-day to $71.62/MW-day and North's REAP more than doubled, from $40.31/MW-day to $88.00/MW-day. Energy arbitrage, not capacity, closed the gap.

How did Real-Time premiums create upside above Reference Prices?

Post-storm Real-Time prices spiked near $2,000/MWh while Day-Ahead prices stayed below $1,000/MWh. This divergence created systematic upside for batteries operating in Real-Time markets.

Real-Time spreads exceeded Day-Ahead spreads across all zones. NYISO-wide, Real-Time TB4 spreads averaged $493/MW-day, 35% higher than Day-Ahead TB4 at $366/MW-day.

This matters because REAP uses Day-Ahead zonal spreads. Batteries capturing Real-Time volatility systematically outperform the Reference Price, enabling them to either exceed their Strike Price or bid more competitively initially.

Did Ancillary Services add value above the Reference Price?

Spinning reserve prices spiked to $228/MWh in NYC on January 24. That single day delivered over 50% of the month's reserve value.

Regulation prices also spiked, tracking reserves closely during the storm. Patterns were similar across NYC, Southeast NY, Capital, and all of the other NY zones.

Ancillary Services represent upside above the Reference Price. Batteries that stacked AS revenues during the storm captured value that neither RCP nor REAP reflects.

Were prices driven by demand or supply?

Supply-side factors drove the price extremes, not demand alone.

Post-storm prices stayed elevated even when net load matched January 2025 conditions. At 20-22 GW of net load, January 2025 prices clustered below $200/MWh. The same net load in post-storm January 2026 produced prices between $200/MWh and $800/MWh.

Average load rose just 0.8% YoY. Peak load increased 2.8%. These modest demand increases do not explain prices that were multiples higher than the prior year.

Did the generation mix explain the price response?

The generation mix shifted but was not unusual. Fossil fuel generation rose by 2 GW during the cold snap to meet elevated demand. Natural gas and dual fuel ramped up during morning and evening peaks.

However, the dispatch pattern matched the shape of the rest of the month and January 2025. Generation mix alone does not explain the price extremes.

Gas drove the disproportionate price spikes

Gas prices surged to $31/MMBtu during the cold snap, up from around $3/MMBtu earlier in the month. Constrained pipeline flows and freeze-offs tightened supply just as heating demand peaked.

Energy prices tracked gas closely through the storm period. The combination of spiking fuel costs and generation constraints pushed power prices to $700-800/MWh, far above levels that demand alone would explain.

Where can nodal positioning add value?

Nodal pricing added up to $30/MW-day of energy arbitrage over zonal Reference Prices in January 2026. Central New York nodes saw the largest advantages. The Cornell node offered a $29.71/MW-day premium over its zone's Reference Price.

Long Island's Far Rockaway nodes also performed well, at roughly $21.64/MW-day above the zonal reference.

Siting at high-advantage nodes allows developers to bid lower Strike Prices or retain additional margin above their Reference Price as earnings. As ISC competition intensifies, nodal analysis becomes increasingly important for project economics.

What does January tell us about NYISO battery opportunity?

January demonstrated that upstate competitiveness can improve dramatically during winter stress events. The 74-90% year-over-year surge in upstate Reference Prices narrowed the traditional downstate advantage.

This convergence reflected a system-wide fuel price shock rather than transmission constraints. With minimal congestion limiting imports to NYC and Long Island, upstate and downstate prices moved together.

But this may not be the only pattern for future winters. If more NYC and Long Island thermal generation retires and the Champlain Hudson Power Express underperforms during cold weather events, downstate could face localized scarcity that widens the gap again.

For developers evaluating ISC bids, the takeaway is nuanced. Winter volatility can lift upstate competitiveness when supply constraints are system-wide. But transmission-constrained downstate scarcity remains a possibility that could favor projects in NYC and Long Island.

Beyond the Reference Price itself, Real-Time capture, Ancillary Service stacking, and nodal positioning offer pathways to outperform. Batteries that combine favorable siting with operational flexibility would have captured multiples of the zonal benchmark during the storm.

This is the first edition of Modo Energy's benchmark report for battery revenues in NYISO. Subscribers to Modo Energy's Research can access detailed nodal data and asset-level benchmarks in the Modo Terminal.