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ISO-NE Integrates “Pay-For-Performance” Incentives Into Capacity Market

June 14, 2018

ISO-New England has integrated new “pay-for-performance” incentives into its forward capacity market that are designed to address rising generator outage rates that have left some power plants unavailable during critical times. ISO-NE will use a system of incentives and fees aimed at forcing older resources that can’t reliably perform into retirement, rather than face increasing charges for non-performance. The system uses a performance-based two-settlement mechanism and will replace the stopgap winter reliability program, which required generators to keep stockpiles of oil or liquefied natural gas onsite.