Docket No. ER24-275-000
I strongly support today’s order and write separately only to commend ISO New England, the NEPOOL stakeholders, and NESCOE on reaching consensus on an important improvement to the region’s ancillary services market. As ISO New England and NEPOOL (Filing Parties) explain in the filing, the Day-Ahead Ancillary Services Initiative (DASI) reforms establish formal obligations and compensation for critical ancillary services that today are relied upon but not reflected in the market.[1] Once the DASI reforms are implemented, ISO New England will procure and transparently price these services in the day-ahead market, thereby compensating sellers for their provision. In addition, sellers will be subject to financial consequences should they fail to deliver on their forward sale and thus have strong incentives to prepare their resources to deliver energy when called upon, particularly in times of system stress.
The DASI reforms appear to be an important step forward for ISO New England’s ancillary services market and one reflecting the region’s evolving operational needs as its resource mix changes. As NESCOE notes, “[a] move toward more weather-dependent resources and increasing electrification will require enhancing the system’s ability to respond to operational uncertainties during the Operating Day,” and “thus it will also become increasingly important for the region to compensate [ancillary services] adequately to ensure adequate participation and performance.”[2]
I recognize that elements of the compensation scheme and market power mitigation in this proposal are novel and, as some commenters assert, warrant continued scrutiny once the new rules become effective.[3] I am therefore pleased that today’s order accepts tariff language committing the Internal Market Monitor to assess and report on the competitiveness and performance of the DASI reforms once implemented.[4] This continued due diligence is wise. But for a proposal of this complexity to have near-universal support in the record and unanimity in the stakeholder process[5] is a testament to the hard work and productive collaboration of many in New England. It is worth taking a moment to give credit where credit is due.
For these reasons, I respectfully concur.