ISO-NE Capacity Market Reforms: What You Need to Know

ISO-New England is moving forward with major capacity market reforms that will reshape how risk and cost are managed in commercial energy deals. Designed to better accredit and reward resources, these changes will also impact forward pricing, procurement strategies, and how brokers position products to customers.

What’s Changing and Why

Under the new design, ISO-NE plans to replace the current three-year-ahead capacity auctions with prompt auctions held just one to two months before delivery. This shift is intended to produce more accurate pricing by aligning procurement with near-term market conditions. The reforms will also introduce seasonal capacity commitment periods, splitting the market into summer (May–October) and winter (November–April) to better reflect seasonal demand patterns. Additionally, the retirement notice period for resources will be reduced from four years to two, giving market participants more timely insight into capacity changes. A new accreditation framework will ensure that resources are credited based on their actual contributions to reliability, improving transparency and market efficiency.

The timeline for these changes starts in Q4 2025 with a filing on prompt auctions and the updated deactivation process, with a second filing planned for Q4 2026 covering seasonal auctions and the new accreditation framework. If approved, the first seasonal and prompt auctions will take place in 2028.

What It Means for Brokers and C&I Customers

For brokers and C&I customers, these reforms will require faster decision-making as procurement timelines are shortened. The new seasonal structure will create opportunities for tailored strategies focused on specific seasonal needs, while the move to prompt auctions may lead to more accurate and potentially more competitive pricing. Brokers who can guide their customers through these changes, offering insight into timing, accreditation rules, and risk management will have a clear advantage in the market.

How SmartestEnergy Is Preparing to Support You

SmartestEnergy is already preparing to support customers through this transition. We are actively monitoring ISO-NE developments, building procurement models for the new auction timelines, and designing flexible, risk-managed products to meet the demands of this evolving market. Through market briefings and one-on-one strategy sessions, we are committed to providing the insights and tools you need to stay ahead of the curve.

ISO-NE’s capacity market reforms represent a significant shift, but they also offer the chance to rethink procurement for greater accuracy, flexibility, and alignment with real market conditions.