ISO-NE declared a capacity deficiency on the evening of Nov. 23 after an unexpected loss of generation left the region short of its operating reserve requirements.
“The timing of the generation loss, coupled with consumer demand being slightly higher than expected, meant other resources could not immediately fill the gap,” the RTO noted in a recap of the event, adding that its “highly trained system operators followed established procedures to maintain system reliability during the shortage period.”
The deficiency conditions lasted from 5:41 p.m. to 7 p.m. The hourly real-time LMP shot up from $111/MWh prior to the event to $865/MWh between 6 p.m. and 7 p.m. The five-minute real-time LMP peaked at $2,665/MWh.
ISO-NE noted that “preliminary information indicates the system event will trigger the region’s Forward Capacity Market Pay-for-Performance rules,” which determine resources’ charges and penalties associated with their performance during deficiency events.
This was the second capacity deficiency event of the year; the first occurred during a period of extreme heat on June 24. (See Extreme Heat Triggers Capacity Deficiency in New England.) While the June event coincided with a peak load of more than 26,000 MW, the highest experienced in the region since 2013, the Nov. 23 event coincided with a moderate peak of about 15,980 MW, which occurred around 5:45 p.m. This peak was about 270 MW higher than the peak forecast by ISO-NE.
While ISO-NE does not identify specific resource outages, data from the RTO show declining gas generation before and after the evening peak load. Gas generation dropped by roughly 1,400 MW between 5 p.m. and 6:30 p.m. Meanwhile, nearly 700 MW of oil generation kicked in during the event.
The two capacity scarcity events experienced so far in 2025 highlight what some market participants view as growing Pay-for-Performance risk in the ISO-NE capacity market. ISO-NE has experienced eight deficiency events since the start of 2016, with five occurring over the past three years.
An increasing number of capacity scarcity events, coupled with higher PFP rates implemented by ISO-NE in recent years, could lead to higher capacity prices in future auctions if participants price increased PFP risks into their capacity offers.
