FERC accepts ISO-NE’s day-ahead reserve market plan
The Federal Energy Regulatory Commission (FERC) has accepted ISO New England’s proposal to create an expanded Day-Ahead Market, recognizing it as an “efficient, transparent, and cost-effective manner” of ensuring sufficient energy and reserves to meet customer demand throughout the operating day.
Known as the Day-Ahead Ancillary Services Initiative (DASI), the reforms will give the power grid greater flexibility as the region relies more heavily on weather-dependent sources of clean energy and increases its use of electricity for heating and transportation. Following FERC’s order, DASI is set to take effect March 1, 2025.
The initiative creates a Day-Ahead Ancillary Services Market and retires the region’s Forward Reserve Market. The new market will compensate resources for providing required energy and reserve capabilities beyond what is secured in the existing Day-Ahead Energy Market. This market will provide strong performance incentives to participating resources, such as dispatchable fuel-fired generators and storage resources, to be prepared to provide energy when the bulk power system experiences sudden shifts in demand or unexpected loss of supply during the operating day.
FERC said in its order that DASI “will materially improve operating reserve resource readiness, efficiency, and day-ahead price formation in ISO-NE without undue increases in wholesale market costs.”
The ISO’s filing with FERC also contains provisions requiring the Internal Market Monitor to assess and report on the competitiveness and performance of major market design changes, including those under DASI.