ISO-NE shares preliminary results of Capacity Auction Reforms accreditation impact analysis

A new analysis of proposed capacity market rules explores how different resource types may contribute to overall power system reliability under simulated modeling conditions.

ISO New England this month shared with stakeholders its preliminary findings around seasonal resource accreditation under the currently proposed Capacity Auction Reforms (CAR) key project. Accreditation involves determining a resource’s anticipated reliability contributions during periods of system stress to determine how much it may offer to sell in the capacity market.

As part of the CAR project, the ISO is looking to move the region toward biannual capacity auctions to account for the different reliability needs in the region in summer and winter.  Toward this end, the new accreditation process will give resources specific summer and winter values to account for variations in anticipated performance from resources during these seasons.

The Resource Accreditation Modeling impact analysis uses a set of assumptions to compare potential resource accreditation values that may result under CAR with potential outcomes representing current capacity market rules. Though resources would receive their own accreditation values in the actual market, results have been grouped together by resource type for the purposes of these informative analyses.

Limitations on the region’s natural gas pipeline system during cold weather will be addressed directly through the application of a gas constraint within the auction, so they are not part of a resource’s accreditation value determined ahead of the auction.

The preliminary study results discussed this month modeled a near-term base case and a future base case for 2035, both grounded in the ISO’s latest Forecast Report of Capacity, Energy, Loads, and Transmission (2025 CELT Report) as a starting point. Further analysis, including two more future cases using different assumptions, will be presented in April.

Accreditation values may change over time as the resource mix evolves and system needs change.

CAR aims to improve power system reliability and cost-effectiveness as the region’s resource mix evolves. The capacity market is part of a suite of wholesale markets administered by ISO New England to attract, retain, and compensate the resources needed to ensure a reliable power system for the region.

ISO-NE filed the first phase of proposed reforms with the Federal Energy Regulatory Commission in December. A separate filing is expected at the end of 2026 on the second phase, which seeks to address the unique reliability challenges of summer and winter and to more accurately measure resources’ ability to perform under stressed system conditions.

A separate impact analysis, examining potential capacity market revenues and costs under specific scenarios, is in progress. The ISO continues to gather stakeholder feedback and plans to present results in the second quarter. A fact sheet provides more information about the CAR project. Additionally, the CAR Proposal Information Summary is updated frequently and breaks down details of the proposal and links to relevant presentations.