EL26-72-000 · 2026-07-20 · ISO New England Inc.

ISO-NE reports on resource adequacy and large-load proposals

July 20, 2026 
VIA ELECTRONIC FILING 
 
The Honorable Debbie-Anne A. Reese, Secretary 
Federal Energy Regulatory Commission 
888 First Street, N.E. 
Washington, D.C. 20426 
Re: 
ISO New England Inc.; Informational Report; Docket No. EL26-72-000 
 
Dear Secretary Reese:   
ISO New England Inc. (“ISO-NE”) hereby submits the informational report required by the 
Federal Energy Regulatory Commission (“Commission”)1 in its June 18, 2026 Order Instituting 
Proceeding Under Section 206 of the Federal Power Act.2  That Order directed ISO-NE to 
outline its plans to ensure that adequate generation will be available to serve existing and new 
large loads.3  Specifically, the Commission noted the reliability concerns created by the addition 
of large loads without concomitant additions of supply or demand-side resources.4   
The Commission required that ISO-NE describe proposals under consideration in the stakeholder 
process to address resource adequacy to serve large loads or increase the pace of adding 
generation capacity, as well as any new proposals.  For each, ISO-NE must include a schedule of 
key milestones, such as dates within the stakeholder process, and the estimated filing date.5  
Below, ISO-NE outlines its resource adequacy outlook, and then addresses existing and potential 
new proposals to meet upcoming challenges.  The commonality of these proposals is their 
reliance on New England’s existing competitive markets as the most cost-effective and efficient 
means of ensuring resource adequacy in New England; as discussed below, resource adequacy 
for New England requires both maintaining sufficient revenue for the existing fleet to remain 
commercially viable, and providing sufficient incentives for new resource investment.  In sum, 
 
1 Capitalized terms used but not defined in this informational report have the meaning ascribed to them in the ISO 
New England Transmission, Markets and Services Tariff (“Tariff”).  ISO-NE anticipates defining “large loads” in 
the Tariff. 
2 ISO New England Inc., 195 FERC ¶ 61,215 (2026) (the “June 18 Order”) at P 119. 
3 Id. at P 4. 
4 Id. at P 118. 
5 Id. at P 119.

The Honorable Debbie-Anne A. Reese, Secretary 
July 20, 2026 
Page 2 of 8 
 
 
ISO-NE believes that New England’s markets are sufficiently mature and flexible to meet 
upcoming challenges.   
I. 
New England’s Resource Adequacy Outlook 
Over the past decade, load in New England has been either flat or declining, and the region has 
generally been long on supply, with a robust, largely uncongested transmission system that 
facilitates the delivery of supply to load.6  Moreover, unlike other regions of the country, New 
England has not yet encountered significant load growth attributable to the addition of large 
loads, such as data centers.7  Nonetheless, ISO-NE has been planning for large loads by working 
with the region’s transmission owners to develop protocols for tracking large loads, and 
incorporating large loads in its forecasting processes.8 
 
The region’s most recent Report on Capacity, Energy, Loads, and Transmission (the “CELT 
Report”) suggests that, into the next decade, electricity demand will grow steadily, given 
electrification and other drivers.9  On the supply side, the CELT Report indicates healthy 
installed reserve margins.10  Nonetheless, ISO-NE is prepared for the factors that are not 
accounted for in the CELT Report and occur in the ordinary course of business, including winter 
gas pipeline constraints, operating reserve requirements, unplanned outages, and reduced 
availability of imports during periods of high demand.11  Moreover, ISO-NE expects that the 
capacity accreditation changes that are part of the Capacity Auction Reforms project (discussed 
below) may further tighten supply margins.  
 
Large loads, obviously, are not the ordinary course of business.  They create unique 
circumstances that will require changes to the Tariff to facilitate their interconnection and ensure 
system reliability.  They may also require new generation at a speed and in amounts that are not 
typical, and that development may be stymied by existing permitting and supply chain 
challenges.  In recognition of these realities, ISO-NE has concluded that New England must, at a 
minimum, (i) maintain its existing fleet through competitive markets that assure the fleet’s 
 
6 Potomac Economics, 2025 Assessment of the ISO New England Electricity Markets (June 2026) (“Potomac 
Annual Report”), available at https://potomaceconomics.com/markets-monitored/iso-new-england/, pp. 4-5 and 
Figure 2. 
7 Gordon van Welie, ISO-NE’s Response to Chairman David Rosner’s September 18, 2025 Letter Seeking a 
Dialogue on Large Load Growth in New England, ISO New England Inc. (Oct. 6, 2025), available at large-load-
forecasting-isone-response.pdf, at 3 of PDF. 
8 Planning for Large Loads in New England, Presentation at the NECPUC Annual Symposium by Al McBride (May 
20, 2026), available at iso_large_loads_necpuc_symposium_mcbride.pdf. 
9 2026-2035 Forecast Report on Capacity, Energy, Loads, and Transmission, ISO New England Inc. (May 1, 2026), 
available at 2026_celt.xlsx, at Tab 1.1, Section 1. 
10 Id. at Tab 1.1, Section 4.2. 
11 Regarding imports, see ISO New England Internal Market Monitor, 2025 Annual Report, (May 29, 2026), 
available at 2025-annual-markets-report.pdf, at p. 39 (net interchange with Canadian and New York balancing areas 
combined was at its lowest level in thirteen years).

The Honorable Debbie-Anne A. Reese, Secretary 
July 20, 2026 
Page 3 of 8 
 
 
continued commercial viability in the near term; (ii) ensure these competitive markets will send 
appropriate price signals to provide incentives for cost-effective new resource development when 
needed; and (iii) maintain the competitive markets’ structure and stability in the face of the 
abrupt emergence of material amounts of large loads.     
  
Initially, ISO-NE outlines why it believes that the markets are well-positioned to meet the first 
two objectives above, and how the region may need to adapt to maintain the markets’ 
functioning as reflected in the third objective.  In sum, the region’s over-arching wholesale 
market structure is designed to, and has proven effective at, cost-effectively compensating 
generation and providing incentives for new entry to reliably meet the needs of the consumers 
the markets were designed to serve.  This design includes not only the capacity market, which 
ISO-NE continues to enhance to address the region’s evolving system (as discussed below), but 
also the region’s energy market – through which the vast majority of generators’ revenue flows.  
 
From an investor’s perspective, these markets work to provide that essential compensation 
because of three key factors.  First, New England’s forward power market prices, which guide 
resources’ future energy revenue expectations, are among the highest in the nation and remain 
elevated for coming years.12  Because of these high prices, some recent analyses indicate total 
wholesale market revenues are presently approaching the cost of new entry for dispatchable 
combined cycle generation in our region.13  Second, as discussed above, New England is now 
facing steady, incremental load growth over the coming decade due to increasing electrification 
(even without large load development), further supporting that the forward market’s energy price 
signals are not likely to abate any time soon.   
 
Finally, investors value a stable market in which they have confidence, facilitated by a 
dependable regulatory environment.  New England has a longstanding stakeholder process that 
collaboratively and thoughtfully produces market enhancements large and small.  The effective 
rule change process in New England helps to bolster confidence in the region’s wholesale market 
for the future.   
 
From ISO-NE’s perspective, the existing competitive market structure has proven able to send 
the appropriate capacity and energy price signals to provide incentives for new entry and 
maintain existing supply in the ordinary course of business.  As discussed in the next section, 
tailored changes currently underway are appropriate to sustain the markets’ strength as the 
system evolves.  In the third section of this report, ISO-NE outlines its preparations for potential 
large loads in New England.  These changes will facilitate the entry of large loads in a manner 
that respects the existing well-functioning markets.  
 
12 S&P Global, Power Daily, July 9, 2026, p. 8 (“PJM and ISO-NE are forecast to have the country’s highest prices 
this summer at $69/MWh and $64/MWh,” citing the Energy Information Administration’s July 2026 Short Term 
Energy Outlook).  Looking further forward, annual average on-peak power contract prices for New England system 
power trading at the Intercontinental Exchange exceed $68/MWh for 2030 (ISO-NE calculations, trade data as of 
July 10, 2026).    
13 Potomac Annual Report at Figure 8, page 21.

The Honorable Debbie-Anne A. Reese, Secretary 
July 20, 2026 
Page 4 of 8 
 
 
II. 
Existing Resource Adequacy Proposals:  Balancing Incentives for New 
Investment with Retention of the Existing Fleet 
As noted above, ISO-NE seeks to preserve its existing fleet as the most cost-effective means of 
maintaining resource adequacy in the short- to mid-term.  That requires achieving a balance 
between the level of risk inherent in market participation and the incentives to perform.  ISO-NE 
also recognizes its obligation to send price signals to investors to build new generation in the 
region when needed. 
 
ISO-NE details below a number of pending projects that are intended to create incentives for 
new investment, retain the existing fleet, and deal with increased uncertainty and volatility.  
Many of these projects are detailed in our multi-year roadmap, which sets out present priorities 
through 2030, and addresses resource adequacy as well as operational uncertainty related to 
steeper ramps, the need for flexibility, and limited energy constraints.14  The projects most 
directly related to resource adequacy and operational uncertainty are:  the reduction in the Pay 
for Performance rate; the Capacity Auction Reforms project; improvements to Surplus 
Interconnection Service; probabilistic forecasting; uncertainty reserves; updated capacity market 
parameters, including revisions to the Cost of New Entry (“CONE”) and net CONE; and work 
with the states to facilitate greater demand flexibility in the region.   
Past projects in the categories of resource adequacy and operational uncertainty include:  the 
changes to generator interconnection practices in compliance with Order No. 2023, as a result of 
which most speculative projects have left the queue, leaving it essentially with no backlog; the 
Day-Ahead Ancillary Services Market, which compensates resources that provide the ancillary 
service capabilities necessary to meet reliability requirements; and the development of the 
Probabilistic Energy Adequacy Tool and the Regional Energy Shortfall Threshold, which, 
together, assess energy shortfall risk and guide consideration of mitigations (such as the need for 
additional resources). 
Pay for Performance (“PFP”).  Per the PFP market rules, resources that receive an obligation 
in the capacity auction risk the loss of their capacity revenues if they fail to perform during 
defined scarcity conditions.  The Capacity Performance Payment Rate is the rate charged to 
capacity suppliers when they fail to meet those obligations; at its current level, it creates 
significant risk for the region’s capacity fleet.15  Older, slow start resources that provide energy 
during both summer and winter high demand events face significant PFP risk due to their slow 
start capabilities.  Of similar concern, strong performers face significant “stop loss” risk due to 
the rate at which stopped losses can accrue under the current high payment rate and the 
obligation of all capacity suppliers to cover those losses when they occur.  These risks may 
 
14 ISO New England Inc. Multi-Year Roadmap (November 5, 2025), available at rsp25-public-meeting-iso-bod-
open-meeting-nov-5-2025-slides.pdf, at slide 35. 
15 External Market Monitor’s 2024 Assessment of the ISO New England Electricity Markets, available at 
https://www.iso-ne.com/static-assets/documents/100025/iso-ne-2024-emm-report-final.pdf, at pp. 69-70 (explaining 
that “excessively high incentives can create inefficient risk for less flexible resources and may lead to inefficient 
retirement decisions”).

The Honorable Debbie-Anne A. Reese, Secretary 
July 20, 2026 
Page 5 of 8 
 
 
increase the likelihood that higher-cost resources will exit the market despite the reliability value 
they provide to the system. 
 
ISO-NE has proposed a downward adjustment to the Performance Payment Rate in a filing that 
was made with the Commission earlier this month.16  The rationale for this change is based on 
empirical evidence that the current rate is not necessary to motivate strong performance by the 
generation fleet; under such circumstances, prudent market design weighs in favor of lowering 
the rate to reduce participation risk in the market, which may in turn promote the continued 
commercial operation of resources that help meet the region’s energy and resource adequacy 
needs (as well as cost reductions for consumers).  Notwithstanding the lowered rate, the marginal 
incentive for performance, inclusive of the shortage pricing in the energy and ancillary services 
markets, can reach approximately $6,000/MWh, which is among the highest in the nation.17 
 
Capacity Auction Reforms.  With this two-phase project, ISO-NE is moving from a three-year 
forward to a prompt seasonal capacity market, which will incorporate updated and more accurate 
information on supply and demand conditions.  The design also includes a marginal reliability 
impact-based accreditation methodology.  This accreditation methodology will better reflect each 
technology’s contribution to resource adequacy, thereby sending appropriate price signals to 
capital markets regarding investment in new and existing resources of different technology types 
as well as resource performance improvements.  The project is also introducing an innovative 
approach to capturing the impacts of the region’s constrained gas system on the gas fleet’s 
resource adequacy contributions.   
 
ISO-NE anticipates making its second filing for this project at the end of this year.  Should the 
Commission approve this second filing, ISO-NE will administer its first prompt and seasonal 
auction in May 2028 (the date through which the region has previously procured capacity).  ISO-
NE is focused on administering the capacity auctions on schedule, as it believes such consistency 
is critical to the wholesale markets and to investors.  As a core market principle, ISO-NE will 
continuously evaluate and work with stakeholders to ensure efficient price formation in the 
capacity market.   
 
Surplus Interconnection Service.  In conjunction with stakeholders, ISO-NE is evaluating 
reforms to the Surplus Interconnection Service design to further accommodate interconnection 
requests that do not increase the type or level of service at a given point of interconnection.  In 
other words, new generating facilities can speed interconnection by co-locating at the same point 
of interconnection with existing resources that have “headroom.”  ISO-NE is presenting a surplus 
gap analysis, followed by design concepts, to stakeholders later this year. 
 
16 Revisions to ISO New England Inc. Transmission, Markets and Services Tariff to Change the Capacity 
Performance Payment Rate to $3,500 per MWh, Docket No. ER26-3047-000, available at 
rev_to_change_the_capacity_performance_rate.pdf. 
17 Id. at p. 5.

The Honorable Debbie-Anne A. Reese, Secretary 
July 20, 2026 
Page 6 of 8 
 
 
Probabilistic Forecasting.  ISO-NE is developing new probabilistic forecasting models and 
methods to forecast not only load, but also the risk of different outcomes at higher or lower load 
levels.  These tools will provide greater situational awareness of risks, enabling the region to 
more cost-effectively meet future system flexibility needs, such as system ramping and reserve 
requirements.  This work should also provide more granular, forward-looking daily system 
information to generators. 
Uncertainty Reserves.  To address the system’s growing need for flexibility given intermittent 
power resources and variability in load, ISO-NE plans to develop dynamic operating reserve 
demand curves for incremental quantities of existing real-time reserve products (10- and 30-
minute reserves) in amounts that vary during the operating day based on the system’s near-term 
potential ramping needs.  Additionally, ISO-NE is evaluating a potential new longer-response 
reserve product (60- or 90-minute), possibly with dynamically-determined demand quantities, to 
address operational uncertainties (unanticipated supply and demand changes) during the 
operating day.  ISO-NE plans to begin a stakeholder process on this topic in 2027. 
 
Updated Capacity Market Parameters.  Generally speaking, every four years, ISO-NE updates 
the capacity market’s parameters, including the net CONE, which recalibrate the market’s 
capacity demand curves.  The next update is due before the 2030-31 capacity commitment 
period.  ISO-NE anticipates that the revisions will reflect new resource development conditions, 
such that the capacity market will continue to send appropriate price signals for new entry when 
the system requires it.  ISO-NE anticipates filing the new values in late 2028 or early 2029. 
 
Demand Flexibility.  Demand response initiatives, at both the wholesale and retail level, can 
provide some of the same benefits as peaking generators in ensuring resource adequacy in 
difficult operating conditions, without siting, permitting and supply chain challenges.  
Accordingly, ISO-NE plans to work closely with the New England states and stakeholders to 
maximize demand flexibility and the use of the existing system. 
 
III. 
New Resource Adequacy Proposals 
ISO-NE appreciates that, in addition to its continuing work to ensure resource adequacy, it must 
explicitly consider the potential impact of large loads on the markets.  While those loads have yet 
to materialize in New England, ISO-NE believes that two related actions will be necessary:  
requiring new large loads to “bring their own” incremental new generation; and excluding new 
large loads from the load-side requirements of the capacity market (i.e., the Installed Capacity 
Requirement).  Both changes are intended to avoid cost-shifts and adverse reliability risks.    
Each is discussed below.   
 
Bring Your Own New Generation.  ISO-NE would like to consider with stakeholders a concept 
that has emerged in Massachusetts,18 other states, and other regional markets:  a “bring your own 
 
18 Press Release, Governor Healy Halts Data Center Tax Incentive (June 25, 2026) available at Governor Healey 
Halts Data Center Tax Incentive and Calls for Strict Guardrails to Protect Ratepayers, Environment & Public Health 
| Mass.gov.

The Honorable Debbie-Anne A. Reese, Secretary 
July 20, 2026 
Page 7 of 8 
 
 
(new) generation” requirement for new large loads.  Implementation will require resolution of 
various issues to ensure that each large load’s expected usage is aligned with the anticipated 
performance of the incremental new generation – effectively, to ensure that a large load cannot 
adversely impact traditional load’s reliability during stressed conditions.   
As part of its compliance with the June 18 Order, ISO-NE intends to pursue rules similar to the 
Southwest Power Pool’s conditional high impact large load service (“CHILLS”) rules, which 
would allow transmission customers serving large loads to receive energy until sufficient 
designated resources and network upgrades are in place, subject to flexibility requirements 
and/or curtailment and interruption.  These flexibility or curtailability requirements will require 
the resolution of related operational issues, including the need for equipment, signals, and an 
appropriate chain of communication to the large load customer.   
 
Subject to discussion with stakeholders, ISO-NE anticipates including a statement in its filing to 
comply with the June 18 Order that will put Eligible Customers on notice that large loads must 
“bring your own new generation.”  Following a robust stakeholder process and resolution of 
operational issues, ISO-NE anticipates filing the detailed supporting rules implementing this 
concept in 2027.  
 
Excluding Large Loads from the Installed Capacity Requirement in the Capacity Market.  
ISO-NE preliminarily proposes to treat large loads differently from traditional firm end-use load 
(and traditional firm load growth) by excluding large loads (e.g., large data centers) from the 
system load forecasts used to set the capacity market’s demand curves and Installed Capacity 
Requirement.  Justifications for this disparate treatment include the size of these loads and the 
potential adverse impact on system reliability if new large loads were to abruptly materialize in 
New England before new generation can be built to serve them.19   
 
Conceptually, the exclusion of large loads from the capacity market’s Installed Capacity 
Requirement complements the “bring your own new generation” obligation.  Namely, the 
capacity market will not procure incremental capacity on behalf of new large loads, which will 
be responsible for their own energy supply. 
  
Subject to discussion and review with stakeholders, ISO-NE anticipates including a statement in 
its filing to comply with the June 18 Order that will put Eligible Customers on notice that the 
capacity market will exclude new large loads.  Following a robust stakeholder process, ISO-NE 
will file detailed rules implementing this concept in 2027.  
 
 
19 While ISO-NE recognizes that high prices can serve an important function in the capacity market to signal 
reduced supply or an increase in native demand (or both), data centers are a generational disruption.  Given the 
present supply chain, siting, and permitting challenges in New England, the signals created by these new large 
loads’ participation may not elicit sufficient timely response unless they develop their own generation concurrent 
with their data center’s development.  We have seen in other regions that the development timelines for data centers 
can be significantly shorter that the timeframes associated with building new generation.

The Honorable Debbie-Anne A. Reese, Secretary 
July 20, 2026 
Page 8 of 8 
 
 
IV. 
Conclusion 
As reflected in the foregoing plans, ISO-NE’s guiding principle is that competitive markets 
remain the most effective and efficient means of ensuring resource adequacy in New England.  
ISO-NE, along with its external and internal market monitors, is committed to continuous 
assessment of New England’s suite of markets to ensure that they create sufficient incentives to 
attract new resources and retain the existing fleet – in other words, support a cost-effective, 
reliable power system.   
 
ISO-NE respectfully requests that the Commission accept this informational report, and looks 
forward to complying in full with the Commission’s directives on the topic of large loads.  ISO-
NE also looks forward to working with states and stakeholders on the ideas contained in this 
report, particularly those in Section III.  Those concepts will benefit from careful consideration 
by states and stakeholders, including significant discussion with the states to address 
jurisdictional issues, and with the transmission owners and market participants to address 
jurisdictional, coordination, and operational issues.   
 
Respectfully submitted, 
                        ISO NEW ENGLAND INC. 
 
 
 
 
 
 
By:_/s/ Maria Gulluni 
Maria Gulluni 
VP, General Counsel and Chief Compliance Officer 
ISO New England Inc. 
One Sullivan Road 
Holyoke, MA  01040-2841 
Tel:   (413) 540-4473 
E-mail: mgulluni@iso-ne.com