The auction clearing price was the lowest in New England’s capacity market history.
New England’s annual capacity auction for power system resources concluded with sufficient resources to meet peak demand for 2023 through 2024. ISO New England Inc. runs the auction to procure the resources needed to meet consumer demand for electricity in three years. The 14th Forward Capacity Market (FCM) primary auction closed at a preliminary clearing price of $2.00 per kilowatt-month across New England, compared to $3.80/kW-month in last year’s auction.
“New England’s competitive wholesale electricity markets are producing record low prices, delivering unmistakable economic benefits for consumers in the six-state region,”
– Robert Ethier, Vice President for System Planning, ISO New England
Forward Capacity Market Auction Basics
The annual FCM auction is held three years before each capacity commitment period to provide time for new resources to be developed. Capacity resources can include traditional power plants, renewable generation, imports, and demand resources such as load management and energy-efficiency measures. Resources that clear in the auction will receive a monthly capacity payment in that future year in exchange for their commitment to provide power or curtail demand when called upon by the ISO. Resources that fail to meet their capacity commitment during a shortage event must refund part of their capacity payment; this refunded money goes to resources that over-performed during the shortage event. The capacity market is separate from the energy market, where resources with and without a capacity commitment compete on a daily basis to provide power and are paid for the electricity they produce. Learn More from ISO New England.