United States of America
Before the
Federal Energy Regulatory Commission

COMMENTS OF THE
NEW ENGLAND STATES COMMITTEE ON ELECTRICITY 

Pursuant to the Combined Notice of Filings issued by the Federal Energy Regulatory Commission (the “Commission”) on July 28, 2025, the New England States Committee on Electricity (“NESCOE”) files comments on the complaint filed on July 25, 2025, by the New England Power Generators Association (“NEPGA”).

I.  DESCRIPTION OF COMMENTER

NESCOE is the Regional State Committee (“RSC”) for New England.  It is governed by a board of managers appointed by the Governors of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont and is funded through a regional tariff that ISO New England Inc. (“ISO-NE”) administers.[1]  NESCOE’s mission is to represent the interests of the citizens of the New England region by advancing policies that will provide electricity at the lowest possible price over the long term, consistent with maintaining reliable service and environmental quality.  These comments represent the collective view of the six New England States.

II.  BACKGROUND

As reported in NEPGA’s complaint, on June 24, 2025, during a record-breaking heat wave, the region lacked sufficient reserves over a three-hour period to meet its minimum reserve requirements, creating a longer-than-typical Capacity Scarcity Condition.[2]  New England’s Pay-for-Performance mechanism uses a “Balancing Ratio” to assign a share of the overall system need during a scarcity event to each resource with a Capacity Supply Obligation.[3]  The Balancing Ratio is calculated by adding load and reserve requirements and then dividing that sum by the region’s total Capacity Supply Obligations (Load+ Reserve Requirement) / Total Capacity Supply Obligation).[4]  During the three-hour emergency period, the Balancing Ratio ranged from 0.996 to 1.062, with an average of 1.031.[5]  Because the Balancing Ratio exceeded 1.0, capacity resources were obligated under ISO-NE’s Transmission, Markets and Services Tariff (the “Tariff”) to provide capacity in excess of their Capacity Supply Obligations or pay penalties.[6]  NEPGA states that, during the three-hour emergency period on June 24, 2025, capacity resources incurred $25 million in penalties for failing to produce in excess of their Capacity Supply Obligations.[7]  NEPGA also states that certain units that were offline and unavailable hit their monthly stop-limit, which in turn resulted in other capacity resources bearing the pool of charges for underperformance, amounting to another $26 million.[8]  In total, NEPGA states that capacity resources bore approximately $51 million in improper charges.[9]

On July 28, 2025, NEPGA filed the instant complaint pursuant to Section 206 of the Federal Power Act.  In its complaint, NEPGA argues that “both the uncapped Balancing Ratio that went above 1.0 and the under-collection methodology caused unjust and unreasonable rates on June 24.”[10]  As a remedy, NEPGA requests that the Commission make two changes to the Tariff: (1) it should cap the Balancing Ratio at 1.0 and (2) “instead of charging resources with a Capacity Supply Obligation to make up any bonus revenue shortfall, simply split the bonus pool that gets collected to pay over-performers.”[11]  NEPGA reasons that “[b]oth steps are required as merely capping the Balancing Ratio does not fix the under-collection and would still result in the same charges to capacity resources in an event like June 24 under the existing ISO-NE Tariff.”[12]  NEPGA further states that “the Commission could opt for any form of relief that ensures capacity is not held to a performance standard that exceeds its Capacity Supply Obligation, but the Commission already approved this mechanism in PJM after ordering changes, and it has proven workable there.”[13]

III.   COMMENTS

NESCOE does not take a position on whether or not the Commission should grant or deny NEPGA’s complaint or whether or not the Commission should order NEPGA’s requested relief.  However, NESCOE does agree with NEPGA on the general principal that a capacity resource should not be held to a performance standard that exceeds its Capacity Supply Obligations.[14]  NESCOE also agrees with NEPGA that a market design that penalizes capacity resources even when they fully perform their responsibilities under the Tariff will eventually either disincentivize resources from participating in the Forward Capacity Market or cause higher risk premiums, which in turn increases both reliability risks and prices.[15]  If the Commission ultimately finds that the tariffed rate is not just and reasonable, NESCOE would support the Commission ordering appropriate refunds pursuant to 16 U.S.C. § 824e(b) to affected capacity resources who, while this complaint is pending, incur penalties for failing to perform in excess of their capacity obligations.

NEPGA’s complaint proposes certain changes to New England’s capacity market design.  The region’s capacity market design is multifaceted and making changes to it without due care could result in unintended consequences. For that reason, NESCOE requests that any tariff changes that the Commission might order be interim measures that would allow for ISO-NE—with broad stakeholder input—to develop a more thorough understanding of the concerns and possibly a more robust and holistic solution to the problem that NEPGA identifies in its complaint.  Indeed, NEPGA acknowledges that the Commission may find it appropriate to order relief on an interim basis, pending the creation of a comprehensive and holistic solution through the regional stakeholder process.[16]

Lastly, NESCOE opposes NEPGA’s request for fast track processing.  As discussed supra, New England’s capacity market design is multifaceted and thus even limited changes could have deleterious effects elsewhere.  Even if the Commission orders only interim relief, as NESCOE recommends, that interim relief should be carefully designed to avoid unintended consequences.  Designing appropriate relief will be more challenging if the Commission places relief on a fast track, depriving the Commission, ISO-NE, and stakeholders the opportunity to sufficiently vet any proposed solution.  Moreover, NEPGA will not be harmed by applying the Commission’s normal procedures to this case.  As ISO-NE correctly points out in its preliminary answer, pursuant to 16 U.S.C. § 824e(b), if NEPGA ultimately prevails on its complaint, then the Commission may order appropriate refunds to capacity resources if the Balancing Ratio exceeds 1.0 and capacity resources suffer harm as a result while NEPGA’s complaint is pending.[17]  Accordingly, the only harm to capacity resources, as NEPGA appears to acknowledge, is a short delay of appropriate refunds in the event that any refunds are necessary.[18]  In addition, due to regional discussions on important accreditation reforms, the region will not be holding a capacity auction in the near future, so there is plenty of time to change the existing rules, if necessary, before they pose any threat to impacting consumers.  Therefore, from NESCOE’s perspective, the public interest in getting the relief right, even if it is only interim, outweighs capacity resources’ interest in receiving refunds, if appropriate, slightly earlier than they would have otherwise under normal procedures.

IV.  CONCLUSION

NESCOE thanks the Commission for its consideration of these Comments.

Respectfully Submitted,

/s/ Nathan Forster
Nathan Forster
General Counsel
Shannon Beale
Assistant General Counsel
New England States Committee on Electricity
P.O. Box 322
Osterville, MA 02655
Tel: (617) 431-0462
Tel: (781) 400-9000
Email:  nathanforster@nescoe.com
Email:  shannonbeale@nescoe.com

Dated: August 21, 2025

CERTIFICATE OF SERVICE

In accordance with Rule 2010 of the Commission’s Rules of Practice and Procedure, I hereby certify that I have this day served by electronic mail a copy of the foregoing document upon each person designated on the official service list compiled by the Secretary in this proceeding.

Dated at Osterville, Massachusetts this 21st day of August, 2025.

/s/ Nathan Forster
Nathan Forster, General Counsel
Shannon Beale, Assistant General Counsel
New England States Committee on Electricity
P.O. Box 322
Osterville, MA 02655
Tel: (617) 431-0462
Tel: (781) 400-9000
Email: nathanforster@nescoe.com 
Email: shannonbeale@nescoe.com