ISO-NE has reiterated its plans not to include in its capacity auction reform (CAR) project the development of ambient temperature modeling capabilities or a new simultaneous seasonal auction clearing engine.
Presenting to the NEPOOL Markets Committee (MC) on Nov. 13, the RTO said it instead plans to consider these reforms for a second phase of work, targeting implementation after the 2028/29 capacity commitment period (CCP 19).
The CAR project encompasses ISO-NE’s work to improve capacity accreditation, reduce the time between capacity auctions and CCPs, and break up annual CCPs into distinct seasonal periods. The initial CAR changes are intended to take effect for CCP 19, with more work planned for CCP 20 and beyond.
In previous MC meetings, representatives of the generation and end-user sectors expressed interest in developing a simultaneously clearing seasonal auction format allowing bidders to incorporate annual costs into their seasonal bids. (See ISO-NE Refines Scope, Schedule for Capacity Auction Reforms.)
Implementing simultaneous seasonal auctions “would require the development of a new clearing engine and new offer/bid parameters to allow resources to offer separately into each season as well as across the year,” said Chris Geissler, ISO-NE’s director of economic analysis.
No other RTO has developed a comparable clearing engine, Geissler said, adding that it would be challenging to complete development in time for CCP 19.
He noted that ISO-NE is still considering how to account for generators’ annual costs within a sequential seasonal format and “will spend time with stakeholders discussing competitive offer prices and mitigation … as part of the seasonal accreditation reforms.”
Regarding ambient temperature adjustments, Geissler said ISO-NE will base capacity accreditation on resource performance at 90°F for the summer and 20°F for the winter and will model the effect of temperature on winter gas availability. However, the RTO is not planning to include any further temperature adjustments in the CAR project.
Clean energy advocates have argued that ISO-NE should model correlated outages associated with ambient temperatures, noting that forced outages pose risks to the grid during periods of extreme cold weather.
Geissler said the RTO is constrained by its modeling capabilities and “limitations in data availability related to audited, temperature-based output ratings for applicable resources.”
Instead, ambient temperature adjustments have been added to the RTO’s post-CAR road map, which also includes consideration of a simultaneous auction clearing mechanism, he said.
“Evaluating this as part of the post-CAR road map will allow the ISO and stakeholders more time to thoughtfully assess the various approaches to ambient temperature adjustments that could be considered, including the pros and cons associated with each approach,” Geissler added.
Capacity Accreditation Concerns
Prior to the MC, the clean energy trade association Advanced Energy United, along with 12 renewable developers, issued a memo expressing concern that ISO-NE has not allotted enough time in the CAR project to reviewing the resource accreditation changes.
ISO-NE had already completed substantial work with stakeholders on proposed capacity accreditation reforms prior to pausing accreditation discussions and broadening the scope of the project to include changes to the auction format.
However, clean energy developers had substantial concerns about the accreditation framework at the time, as impact analysis results released prior to the pause showed a significant loss of revenue for battery storage resources. (See ISO-NE: RCA Changes to Increase Capacity Market Revenues by 11% and ISO-NE Capacity Accreditation Reforms Spur Energy Storage Concerns.)
“We believe accreditation will continue to be the most complex and impactful piece of the CAR project,” the groups wrote.
They advocated for stakeholder sessions in early 2025 to discuss resource adequacy modeling and marginal reliability impacts and called on ISO-NE to conduct its final impact analysis earlier in the process to provide time for more changes if needed. ISO-NE plans to resume accreditation work with stakeholders in late 2025, aiming to file the accreditation aspects of the CAR project with FERC in late 2026.
“While we recognize that aspects of accreditation cannot move forward without an informed prompt and seasonal design, there are many aspects of the current accreditation framework that will remain relevant and applicable,” the groups added.
Geissler said ISO-NE is still evaluating how accreditation in the CAR project will compare to the previous resource capacity accreditation (RCA) framework and said the RTO “will bring items related to accreditation to stakeholders as soon as they are ready for discussion” and “will prioritize explaining how the design is the same or how it has evolved since the RCA presentations.”
