ISO New England, the operator of the region’s bulk power system, said an auction Monday to secure energy for 2017 and 2018 ended with a slight shortfall, which will result in higher prices.
The auction netted 33,700 megawatts of capacity, short of the 33,855 megawatts required.
ISO said the shortfall reflects a need for new energy resources, particularly as nearly 10 percent of the region’s energy resources were retired over the past several months.
The shutdown of New England plants with a combined capacity of more than 3,100 megawatts, including Norwalk Harbor in Connecticut, is creating a need for other resources in the near future, Gordon van Welie, ISO’s CEO, said in a statement.
“The region abruptly went from a capacity surplus and low prices in previous auctions to a capacity shortfall and relatively high prices,” van Welie said. “The slim capacity margin and the resulting auction prices are a clear signal to the marketplace that the region needs more power generation and demand reduction capacity.”
ISO will pay $15 per kilowatt-month in 2017 and 2018 to 1,370 megawatts of new capacity resources cleared in the recent auction, while about 24,885 megawatts of existing resources will receive $7.02.
