Power generators convert gas to electricity at a heat rate measured in MMBtu per MWh. The spark spread is the power price minus the heat rate times the gas price, and it is the number that decides whether a plant runs today.
Efficient combined-cycle plants quote around 7.0 MMBtu/MWh; older peakers are nearer 10.0. Because the heat rate is the multiplier on gas, the same gas price produces very different spreads across the fleet, and the marginal plant sets the power price.
Traders express the spread with power futures against natural-gas-futures. It is the cleanest way to trade electricity demand without taking a naked view on either leg.
Example: power $45/MWh, gas $3.20/MMBtu, heat rate 7.5. Spark spread = 45 - (7.5 x 3.20) = $21.00/MWh. If gas rallies to $4.50 with power unchanged, the spread falls to $11.25 and the plant's economics halve.
Related: natural-gas-futures, dark-spread, crack-spread, henry-hub, intercommodity-spread