Navigating ISO-NE

On November 9, 1965, an interruption in a single transmission line set in motion the Great Northeast Blackout, resulting in 30 million customers across 8 states losing power. Six years later, five of the affected states (Connecticut, Massachusetts, New Hampshire, Rhode Island, and Vermont) as well as Maine, which collectively comprise the six-state New England region, created the New England Power Pool (NEPOOL). NEPOOL set out to centralize the dispatch of generation for New England, as well as undertake joint planning and pursue measures to improve system reliability and cost.

In 1996, following efforts by FERC to open the country’s transmission systems to “fair and nondiscriminatory access” and remove obstacles to competition in wholesale electricity markets, NEPOOL proposed the creation of a new regional grid operator.

A year later, in 1997, the New England Independent System Operator (ISO-NE) was created to “operate [the] regional power system, implement wholesale markets, [and] ensure open access to transmission lines.” ISO-NE subsequently became the FERC-recognized Regional Transmission Organization (RTO) for the region.


  • System planning for high levels of clean energy resources.
  • Full accounting, integration, and valuing of clean energy resources required under New England states’ climate and clean energy laws, including offshore wind and solar, in ISO-NE’s markets.
  • Maximizing the efficiency of the current grid through grid-enhancing technologies, transmission needed to integrate renewable energy, and energy storage.
  • Full integration of demand-side resources into ISO-NE’s markets and continued improvements in forecasting and accounting for distributed resources.
  • Meaningful system planning between ISO-NE and other grid regions.

Over the last 20 years, the shares of New England’s electricity met by renewable energy and gas have increased while generation from coal and oil has decreased. The percentage of power imported from neighboring regions has also increased over the last decade. Growth in energy efficiency and distributed resources, such as rooftop solar, driven by state policies has further reduced demands on the wholesale ISO-NE grid, with distributed resources now accounting for 20 percent [see here] of system capacity. Looking ahead, the vast majority of new generation proposing to interconnect to the ISO-NE system is from renewable power sources.

New England states are driving the transition to clean energy through their commitments to address climate change and adoption of some of the most ambitious clean energy laws in the country. Unfortunately, ISO-NE’s market rules and initiatives are increasingly coming into conflict with these state mandates, through measures that favor incumbent fossil fuel generation and undervalue clean resources. Moving forward, it is critical that ISO-NE’s markets and planning practices actively facilitate and help to accelerate New England states’ energy and environmental priorities, rather than hinder them.


ISO-NE is responsible for operation of the bulk transmission system and wholesale electricity markets across the six New England states—Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont—a region with a population of 14.8 million people. As of 2020, the ISO-NE system includes:

  • Service territory: 71,680 square miles
  • Power plants: 350
  • Miles of transmission: 9,000
  • Peak demand (2019): 24,400 MW

ISO-NE’s transmission owners include:

  • Emera Maine
  • Eversource Energy Service Company
  • New England Power Company
  • Vermont Electric Power Company


Summer Peak Capacity (2021)

Source: S&P Global Market Intelligence

Net Generation (2021)

Source: S&P Global Market Intelligence


Annual carbon emissions (in short tons) in the ISO-New England RTO region. Source: EPA.


As of October 2023, there are 43 GW of proposed new capacity in the ISO-NE interconnection queue, a 16% increase in queue volume compared to the end of 2022. The bulk of the proposed new capacity is from offshore wind resources in Massachusetts, just behind standalone storage capacity, which consists both of new projects and battery additions to existing renewable generators.

ISO-NE interconnection queue, October 2023.


One of ISO-NE’s key roles is overseeing New England’s wholesale electricity markets, which are intended to ensure the region has sufficient electricity to meet customer demand and to lower costs through competition. ISO-NE oversees markets for energy, ancillary services, and forward capacity. In 2018, the total value of these markets was $9.8 billion.

The energy market consists of a day-ahead market and a real-time market. Both markets produce locational marginal prices (LMPs) that reflect the value of energy at different locations on the grid, accounting for geographic differences in supply, demand, and transmission constraints.

Day-Ahead Market

The day-ahead energy market allows market participants to buy and sell energy for hours of the following day and hedge against price fluctuations that can occur in real time. One day ahead of actual dispatch, participants submit supply offers and demand bids for energy. These bids are applied to each hour of the day and for each pricing location on the system.

Generators and offers scheduled in the day-ahead settlement are paid the day-ahead LMP for the megawatts accepted. Scheduled suppliers must produce the committed quantity during real-time or buy power from the real-time marketplace to replace what they did not produce.

Real-Time Market

The real-time energy market operates during the delivery day and balances differences between day-ahead energy market commitments and real-time energy demand and availability. Supply or demand for the operating day can change for a variety of reasons, including unforeseen generator or transmission outages, transmission constraints or changes from the expected demand.

While the day-ahead market produces the schedule and financial terms for most physical transactions, a number of factors usually change the day-ahead result. Thus, ISO-NE operates a spot market for energy, the real-time energy market, to meet actual energy needs within each hour of the operating day.

Generators and offers scheduled in the day-ahead settlement are paid the day-ahead LMP for the megawatts accepted. Scheduled suppliers must produce the committed quantity during real-time or buy power from the real-time marketplace to replace what they did not produce.

Energy market data, including current and historical real-time and day-ahead prices are available here. Charts and maps of real-time energy LMPs and other system data are available here.

Ancillary Services

The ancillary services markets compensate resources for providing additional services needed to ensure system reliability. For example:

  • Reserve markets incentivize market participants to “reserve” capacity beyond what the system requires to provide a backup that ensures the system is able to meet energy demand during system contingencies (e.g., if a powerplant unexpectedly trips offline).
  • The regulation market compensates specially-equipped market participants for allowing ISO-NE to increase or decrease their output as needed to react to the second-by-second needs of the system, including the need to balance demand and maintain system frequency.

Two services not in the ancillary services markets are voltage support to ensure maintenance of the system voltage needed for continuous and reliable electricity flow; and blackstart service, which allows ISO-NE to call upon strategically-located generators that are able to restart without an outside power supply to re-energize the transmission system following a partial or complete shutdown of the system.  ISO-NE procures both of these services on a cost-based basis.

Capacity Market

ISO-NE operates a forward capacity market (FCM) that is intended to ensure the system has sufficient capacity resources—including both generation and demand-side resources like energy efficiency and demand response—plus a reserve margin, to meet future projected demand. The FCM operates via an annual forward capacity auction (FCA) that seeks to secure capacity resources three years in advance of the delivery year, which runs from June 1 to May 31 (e.g., June 1, 2020 to May 31, 2021).

Resources submit bids in the FCA to supply capacity, resulting in a single auction clearing price. If a resource clears in the FCA it receives a Capacity Supply Obligation (CSO) that commits it to supply the agreed upon amount of capacity in exchange for the market-priced capacity payment. 

Market Monitor

Potomac Economics is the market monitor for ISO-NE. It monitors all of the ISO’s markets, and provides regular reports on the state of the markets.


Every two years, ISO-NE prepares a comprehensive Regional System Plan, which assesses the bulk power system’s transmission and other needs to ensure reliability over the next 10 years. The RSP draws from system studies and forecasts prepared by ISO-NE in between RSP study years and is developed with input from the New England states and regional stakeholders. The 2019 RSP is available here.

In addition to the RSP, ISO-NE publishes a variety of other studies and reports, including:


ISO-NE is overseen by a 10-member Board of Directors whose members are required to have no financial interest in any company participating in New England’s wholesale electricity markets. Board members are nominated by a committee that includes ISO-NE, NEPOOL, and the New England Conference of Public Utilities Commissioners (NECPUC) and are subject to endorsement by NEPOOL’s Participants Committee.

Unlike other RTOs, a separate entity, NEPOOL, manages stakeholder engagement with ISO-NE. A Participants Agreement formally establishes the relationship between ISO-NE and NEPOOL, including the process by which ISO-NE brings proposed changes to its Tariff to NEPOOL stakeholders for comment and review. A Memorandum of Understanding between ISO-NE, NEPOOL, and the New England States Committee on Electricity (NESCOE) further lays out the relationships, rights, and responsibilities between the three parties.

Within NEPOOL, the NEPOOL Agreement establishes the organization’s structure including its six energy sectors, the rights and responsibilities of NEPOOL members, committee structure, and procedures for voting on proposed changes to NEPOOL rules and to weigh in on ISO-NE proposals. Each sector receives an approximately equal voting share, divided among its sector members.

ISO-NE’s organizational structure illustrates the relationships among NEPOOL, the states, and ISO-NE.

ISO-NE’s markets and planning procedures are contained in its Transmission, Markets, and Services Tariff (Tariff), amendments to which must be approved by FERC.


NEPOOL is the principal stakeholder forum for most ISO-NE issues. NEPOOL is a dues-paying, voluntary membership-based organization, with its members organized into six energy sectors:

  • Alternative Resources
  • End Users
  • Generators
  • Publicly Owned Entities
  • Suppliers
  • Transmission

Consumer, environmental, and public interest entities are able to join NEPOOL and participate via the End User sector.

The New England states also participate in ISO-NE and NEPOOL stakeholder processes via the New England States Committee on Electricity (NESCOE), which represents the collective perspectives of the region’s governors.

Per the organization’s rules, NEPOOL meetings are open only to NEPOOL members and invited guests. Non-members must receive permission to attend. To participate in the organization, NEPOOL members must pay annual fees, with the fee amount starting at $500 per year and potentially increasing depending on the member’s size and sector.


Participants Committee

NEPOOL’s principal committee, consisting of all NEPOOL members. The committee provides input to ISO-NE on its annual budget and proposed changes to the ISO-NE Tariff and other rules and procedures, with the advice of NEPOOL’s three technical committees: Markets, Reliability, and Transmission.

Markets Committee

Provides advice and recommendations to the Participants Committee and ISO-NE on the region’s wholesale electricity market rules and procedures.

Reliability Committee

Provides advice and recommendations to the Participants Committee and ISO-NE on reliability issues, including reliability standards and procedures; load forecasts; plans for supply and demand-side resources, transmission, and interconnections; dispatch infrastructure; and capacity requirements.

Transmission Committee

Advises the Participants Committee, ISO-NE, and transmission owners on proposed changes to transmission-related provisions of the ISO-NE Tariff, the Transmission Operating Agreement, and other issues related to the reliable and efficient operation of the transmission system.

ISO-NE Planning Advisory Committee

The primary forum to discuss planning issues and enables stakeholders to provide feedback on the development of the RSP, potential economic studies for ISO-NE to undertake, development and review of transmission needs assessments, public-policy transmission studies, and studies and procedures for competitive transmission procurements.

ISO-NE has also organized a number of stakeholder working groups under the PAC that cover specific planning issues, including for forecasting energy efficiency and distributed generation, and for tracking environmental laws and regulations and studies.