ISO-NE Forward Capacity Market Description
The Forward Capacity Market (FCM) ensures that the New England power system will have sufficient resources to meet the future demand for electricity. Forward Capacity Auctions (FCAs) are held annually, three years in advance of the operating period. Resources compete in the auctions to obtain a commitment to supply capacity in exchange for a market-priced capacity payment.
These payments help support the development of new resources. Capacity payments also help retain existing resources. For example, they incentivize investment in technology or practices that help ensure strong performance. They also serve as a stable revenue stream for resources that help meet peak demand but don’t run often the rest of the year.
Note that ISO-NE’s Capacity Auction Reforms project that will transition the Capacity Market from a forward/annual market to a prompt/seasonal market with accreditation reforms. Here is a calendar of upcoming and past energy auctions for the ISO-NE capacity market.
ISO-NE Forward Capacity Auction 19 Schedule Update
Please note that the ISO-NE Forward Capacity Auction 19 (FCA 19) has been delayed, and is potentially going to be held in February 2028.
As of August 2024, ISO-New England has not finalized the schedule for FCA 19 for the Capacity Commitment Period 2028 – 2029.
Further background: ISO-NE has an ongoing Key Project called the “Capacity Auction Reforms Key Project (CAR)”. This initiative has three primary components that would be in place for the Capacity Commitment Period (CCP) scheduled to start on June 1, 2028. These components are:
- Prompt Auction – Instead of three years in advance, the capacity auction would take place shortly before the capacity commitment period, reflecting more accurate information about projected electricity supply and demand.
- Seasonal CCP: The CCP changes from annual to sub-annual (seasonal) commitment periods to better address the distinct reliability challenges of winter and summer, as well as variations in resource performance from season to season.
- Accreditation Reforms: It is critical to the reliable and efficient clean-energy transition that the capacity accreditation methodologies are updated to reflect evolving resources’ capabilities and how those capabilities contribute to resource adequacy.
The former “Resource Capacity Accreditation in the FCM” project started to identify methodologies that would more accurately reflect resource adequacy in the Forward Capacity Market. That Capacity Accreditation work continues with the CAR project in the context of these newly developing market constructs.
Please note that ISO-NE led discussions with stakeholders in the summer/fall of 2023 considering a move to a prompt and/or seasonal Capacity Market with accreditation reforms. ISO-NE proposed a further delay to FCA 19 to allow for time to develop a prompt and seasonal design with accreditation reforms. NEPOOL supported and FERC has accepted that proposal as of May 20, 2024.
Updated March, 2025
Notes
- ESAI Power is providing this information to assist you in understanding the schedules for different ISO/RTO Energy Auctions.
- ESAI Power urges all market participants to check all market rules and ensure that you are complying with all requirements for each ISO/RTO.
More Information
- To confirm dates for ISO-NE FCA Auctions – please consult the ISO New England FCM schedule:
https://www.iso-ne.com/static-assets/documents/2022/02/fcm-schedule-01-26-2022.pdf - Full details on the schedule for FCA19 can be found here:
https://www.iso-ne.com/static-assets/documents/2022/02/fca-19-market-timeline-01-20-2022.pdf - Full details on the Capacity Auction Reforms (CAR) Key Project:
ISO-NE Capacity Auction Reforms (CAR) Project
About ESAI Power
ESAI Power is a market research and consulting firm that delivers focused analysis of the US wholesale power markets: PJM, NYISO, ISO-NE & MISO. Since 2003, ESAI has been providing Capacity, Energy, Renewables, Emissions, and Transmission coverage for Equity Investors, Lenders, IPPs, Power Generation Asset owners, Developers, Traders, regulators & RTOs to support better investment and trading decisions in PJM, NYISO, ISO-NE & MISO. Our market analysts and consultants also support buy-side M&A work for private equity investors and IPPs assessing the valuation of Power Plants and Renewable Energy investments.