New England Capacity Auction Procures Adequate Resources for 2025-2026

New England’s annual capacity auction ended with adequate power system supplies to satisfy peak demand in 2025-2026, with clearing prices ranging from $2.531 to $2.639 per kilowatt month across various pricing zones. The value of the capacity market in 2025-2026 will be about $1.04 billion, according to preliminary estimates in the results released on March 9. This is down from $1.36 billion last year.

The auction, the grid operator’s sixteenth Forward Capacity Auction (FCA 16), ensured capacity guarantees of 32,810 megawatts (MW) be accessible in 2025-2026. Preceding the auction, the Federal Energy Regulatory Commission accepted ISO New England Inc.’s proposed capacity requirement of 31,645 MW to fulfil reliability obligations for the region’s power system. The auction guidelines permit the region to obtain additional or less capacity, dependent on the demand curves, approved by the capacity prerequisite; this offers flexibility to purchase supplementary capacity and improved dependability at a cost effective price. Resource participation totaled 38,602 MW, which includes 33,356 MW of existing capacity. New capacity amounted to 5.246 MW from 302 new qualified resources.

Almost 5,000 MW, or 15 percent, of all capacity that cleared the auction consisted of solar and wind generation, energy storage and demand resources. Moreover, the New England region was allocated into four zones that indicate local capacity requirements and transmission limitations.

The annual auction is conducted three years ahead of each capacity commitment period to provide adequate time to develop new resources. FCA 16 was held on Feb. 7 and ended following four rounds of competitive bidding. This year, litigation associated ambiguity encompassing the status of the Killingly Energy Center, a natural gas-fired power plant in Connecticut, led the New England grid operator to keep FCA 16 results confidential until further notice. Orders by FERC and the D.C. Circuit Appeals Court affirmed that Killingly’s capacity supply obligations are terminated, and hence the auction results do not include the plant.