ISO New England (ISO-NE) Demand Response Programs

ISO New England manages the electric grid and wholesale markets for the six New England states. Demand Response resources participate alongside generation in ISO-NE's energy, capacity (Forward Capacity Market - FCM), and ancillary services markets.

C&I customers typically participate through market participants, which can be their utility or third-party Demand Response Providers (aggregators).

Key ISO-NE DR Programs for C&I

Active Demand Capacity Resource (ADCR)

• Administered By: ISO-NE (via Market Participants/Aggregators)
• Type: Capacity & Energy (Hybrid Emergency/Economic)
• Goal: Provide capacity to meet resource adequacy needs (via the FCM) and deliver energy reductions when dispatched by ISO-NE for reliability or high price reasons.
• Participation: Dispatchable C&I load reductions (sites ≥100 kW, smaller sites aggregated) registered as capacity resources in the FCM.
• Response: Typically dispatched with ~30 minutes notice during tight supply conditions or high price periods. Resources effectively bid into the day-ahead or real-time energy markets.
• Baseline: Standardized methods defined in ISO-NE's Measurement & Verification documents (e.g., average of recent similar days with adjustments).
• Stackability: Generally exclusive per capacity commitment. An ADCR providing capacity in the FCM cannot typically simultaneously earn full payment from a separate utility DR program aimed at the same system peak hours (utility payments may be reduced or participation channeled to one program). However, ADCRs *do* earn both capacity and energy market revenues. Can also provide reserves if technically capable and separately registered.
• Requirements: Registration via a market participant, interval metering. Real-time telemetry may be required for larger resources or those providing reserves. Subject to ISO-NE performance auditing and Pay-for-Performance rules in the capacity market.
• Incentives:
  • Capacity Payment: Earns the Forward Capacity Market (FCM) clearing price ($/kW-month). Recent FCM prices have been relatively low compared to other markets (e.g., ~$2-3/kW-month or $24-36/kW-year range in 2022-2024), but still provide a steady revenue stream.
  • Energy Payment: When dispatched, paid the real-time Locational Marginal Price (LMP) for the energy reduction (MWh), similar to a generator. This can be significant during peak hours or scarcity events.
• Penalties: Subject to FCM Pay-for-Performance rules. Failure to perform during scarcity conditions can result in capacity payment reductions or penalties.

Operating Reserves & Regulation (On-Demand DR)

• Administered By: ISO-NE (via Market Participants/Aggregators)
• Type: Ancillary Service
• Goal: Provide fast-response reserves (10-minute or 30-minute contingency reserves) or frequency regulation to maintain grid stability.
• Participation: C&I sites (typically ≥1 MW) with highly automated, fast-responding loads or integrated batteries/generation.
• Response: Within 10 or 30 minutes for reserves; sub-minute, continuous adjustments for regulation, following ISO-NE dispatch signals.
• Baseline: Performance typically measured via real-time telemetry against pre-dispatch load or dispatch instructions.
• Stackability: Cannot typically count the same MW for both capacity (ADCR) and reserves unless structured appropriately (e.g., separate capacity amounts).
• Requirements: Direct telemetry to ISO-NE's control systems, advanced controls, rigorous testing.
• Incentives: Earn market-clearing prices for the specific reserve or regulation service provided ($/MW-hr for availability, plus potential mileage payments for regulation). Can offer additional revenue but participation is less common for pure load resources.

Price-Responsive Demand (Integrated)

• Note: ISO-NE previously had separate voluntary price response programs. Now, price response is largely integrated into market operations. C&I customers on real-time pricing tariffs or participating via aggregators bidding their load (e.g., as part of an ADCR strategy) respond economically to high LMPs.

Link to Utility Programs

Many New England states have active utility-run DR programs, often funded through energy efficiency plans (e.g., ConnectedSolutions). These programs frequently interact with ISO-NE market participation. Learn more about New England Utility DR Programs.

ISO-NE Program Comparison Summary

Disclaimer: Incentive values, especially capacity prices, depend on specific auction results and market conditions. Always consult official ISO-NE documentation and your market participant/aggregator for current program details and potential earnings.